BRF SA Reports Record First Half Amidst Market Challenges, Eyes Market Diversification and Cost Savings

BRF SA reported a record first half of the year with an EBITDA of 5.3 billion reals and a net income of 1.9 billion reals. Net revenue reached 15.4 billion reals, a 3% increase compared to 2024. The company expanded its market diversification strategy, increased its active customer base, and launched new products and campaigns. However, it faces challenges from avian influenza, excess poultry supply in Turkey, increased expenditures, and the impact of avian flu on exports to key markets like China and Europe.

BRF SA (NYSE:BRFS) reported a record first half of 2025, with an EBITDA of 5.3 billion reals and a net income of 1.9 billion reals. Net revenue reached 15.4 billion reals, a 3% increase compared to the same period in 2024 [1]. The company expanded its market diversification strategy, increasing its active customer base and strengthening its portfolio of high-quality value-added products. Additionally, BRF SA successfully launched new products and campaigns, enhancing brand visibility and consumer preference [1].

However, BRF SA faced several challenges. Avian influenza imposed numerous restrictions on chicken exports, affecting profitability in certain markets. Despite a decrease in commodity prices, such as grains, the cost reductions have not yet been fully reflected in BRF SA's unit costs [1]. The company also faces challenges in maintaining profitability in the Turkish market due to excess poultry supply and local economic pressures [1]. Increased expenditures, particularly in labor costs, due to low unemployment rates in Brazil, have also impacted the company's financial performance [1].

The impact of avian flu on exports to key markets like China and Europe remains a significant concern. Despite securing over 198 new export permits in the past two years, BRF SA has redirected products to other markets like Hong Kong and Africa, although at lower prices. The Chinese market remains closed, but there is optimism for reopening soon, which could help recover margins [1]. The company's cost reductions in animal feed are expected to positively impact margins in the second half of the year [1].

BRF SA's financial performance in the second quarter of 2025 was mixed. The company reported quarterly adjusted earnings of 46 centavos per share, lower than the same quarter last year but higher than the mean expectation of two analysts [2]. Revenue rose 2.9% to R$15.36 billion from a year ago, slightly exceeding analyst expectations [2]. Despite these results, BRF SA shares fell by 6.3% this quarter and lost 25.6% so far this year [2]. Analysts' mean earnings estimate had risen by about 10.9% in the last three months, and the current average analyst rating on the shares is "buy" [2].

Looking ahead, BRF SA's ability to navigate the volatile global protein market will be crucial. The company's cost-cutting initiatives, export diversification, and plant-based innovation are key pillars of resilience. However, high debt levels and intensifying competition from industry giants pose long-term risks [3]. Analysts project a 42.64% upside potential for BRF, but a 37.2% downside risk from avian flu recurrence and trade disruptions [3].

References:
[1] https://sg.finance.yahoo.com/news/brf-sa-brfs-q2-2025-150043320.html
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3U70ZV:0-brf-sa-reports-results-for-the-quarter-ended-june-30-earnings-summary/
[3] https://www.ainvest.com/news/brf-sa-strategic-resilience-q2-2025-earnings-navigating-avian-flu-trade-disruptions-global-protein-market-2508/