USA – BRF S.A, the Brazilian food company has registered a loss of US$32 million in the quarterly results despite rising domestic sales citing a difficult trading environment especially after trade bans imposed by Russia and Europe on Brazilian meat products.

As a result of trade bans, the company was forced to send workers on paid leave and according to Chief Executive Lorival Luz, challenges in the period included high prices for animal feeds especially in the second quarter consequently increasing production costs.

Year-on-year net revenues rose 5% to US$2.3 million while gross profit increased by 11.7% to US$433 million despite of a difficult business climate that resulted to reduced capacity at five of its facilities due to a food safety probe.

In the same quarter last year, BRF’s net revenue fell 7.8% from US$2.5 billion and gross profit was down 15.6% from US$512 million.

According to Reuters, the quarter for BRF remained difficult despite its efforts to increase volumes in Brazil by 9.6% driven mainly by sales of fresh chicken, which tend to have lower margins and prices than processed foods.

“The performance of the domestic market stood out and more than offset the decrease in international sales, which were negatively affected by the restrictions imposed by Russia and Europe,” said Luz.

Luz said although BRF has not been officially notified by the European Commission on their decision to exclude 12 of its plants from the list of establishments authorized to export chicken to the European bloc, Brazilian authorities launched an appeal to the World Trade Organisation (WTO) in April to stop the ban.

Following the ban by the EU, the company announced the resignation of the company’s CEO José Aurélio Drummond Jr with its Chief Financial Officer Lorival Nogueira Luz Jr becoming the interim CEO.

In the year’s outlook, Luz said, “The next quarters will be extremely challenging. Important themes, such as those mentioned above, will influence the results for the year.

However, all executives, under the leadership of the new Board of Directors, are dedicated and motivated to resume our growth track.”