- **Record First Half Performance**: EBITDA of BRL 5.3 billion and net income of BRL 1.9 billion, fueled by Brazil’s processed products growth and international market diversification.
- **Avian Flu Resilience**: 198 new export authorizations mitigated China/Europe losses, with China market reopening expected soon.
- **Cost Savings**: Animal feed costs set to decline 2% YoY in H2, supporting gross margin expansion.
- **Halal Market Expansion**: Sadia Fresh line in Saudi Arabia and GCC market share gains highlight strategic growth initiatives.
- **Financial Strength**: Lowest leverage ratio (0.43x) and free cash flow of BRL 1.3 billion (ex-acquisition) underscore financial discipline.

**【CEO Opening Remarks】**
- BRF reported the best first half of the year with EBITDA of BRL 5.3 billion and net income of BRL 1.9 billion, driven by operational excellence and strategic market diversification.
- Despite avian flu-related export restrictions, the company maintained progress in its market diversification strategy, increasing the active customer base to over 330,000 points of sale in Brazil.
- Highlighted product innovations include new pork cuts, ready-to-eat snacks, and partnerships with Marfrig brands to expand the budget portfolio.

**【CFO Financial Commentary】**
- Q2 2025 net revenue reached BRL 15.4 billion (+3% YoY), with EBITDA of BRL 2.5 billion and free cash flow of BRL 850 million (BRL 1.3 billion excluding Henan plant acquisition).
- BrazilRL 1.3 billion ( operations reported EBITDA of B16.4% margin), driven by volume growth in processed products.
- International markets maintained healthy margins (17.3%) despite avian flu challenges, with 198 new export authorizations offsetting lost China volumes.
- BRF+ efficiency program delivered BRL 208 million in cost savings, contributing to the lowest leverage ratio in company history (0.43x LTM EBITDA).
- ESG initiatives included carbon-free certification for Sadia’s chicken line in Saudi Arabia and expansion of halal market presence.

**【CEO Closing Remarks】**
- Emphasized BRF’s resilience and agility in managing avian flu, with 198 new export authorizations enabling rapid market reallocation.
- Highlighted the success of the Sadia Fresh halal line in Saudi Arabia and expanded market share in GCC countries.
- Reiterated commitment to internal talent development, with 70% of leadership roles filled internally over the past year.

**【Q&A Highlights】**
- **Avian Flu Mitigation**: BRF leveraged 198 new export authorizations to redirect products to alternative markets, maintaining price resilience. China market reopening expected in coming weeks.
- **Cost Management**: Animal feed costs expected to decline 2% YoY in H2, driven by lower corn prices. Soybean meal orders extended into 2026 to lock in savings.
- **Brazil Market Resilience**: Processed products prices rose 11% YoY, supported by strong domestic demand and brand pricing power.
- **Capacity Utilization**: Idle capacity in key categories is near zero, with BRF+ program driving 50% faster volume growth than historical averages.
- **Inventory Strategy**: Elevated finished goods inventory (BRL 1.5 billion) will be managed through reopening markets, with no plans to destroy value.


BRF S.A. (BRFS) Q2 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

BRFS(Delisted)

BRFS fundamentals

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