* Inflation erodes domestic demand for poultry and pork
* Currency swing helps exports, but global growth weighs
SAO PAULO, July 29 Brazilian processed foods
maker BRF SA reported a lower-than-expected
second-quarter profit on Monday due to weak domestic demand.
The company said in a market filing that demand in Brazil
was hurt by high inflation and consumer caution about the
short-term outlook for the economy. Inflation in the 12 months
ended June 30 reached 6.7 percent, according to the IPCA
consumer inflation index.
Net profit was 208.4 million reais ($92 million), up from
6.4 million reais a year earlier but well below analysts'
average forecast of 360 million reais.
Earnings before interest, taxes, depreciation and
amortization, a widely followed indicator of a company's cash
flow known as EBITDA, rose 55 percent to 801 million reais but
fell short of analysts' average forecast of 903 million reais.
The cost of goods sold rose 5.5 percent due to non-feed raw
materials and labor costs. Feed costs, the company's biggest
outlay, actually fell over the quarter, with corn down 19
percent from the first quarter and soy down 8 percent.
The appreciation of the dollar against Brazil's currency,
the real, improved the company's results on sales abroad.
Export sales rose 19 percent from the first quarter to 3.4
billion. But compared with exports in the 2012 second quarter,
pork revenues were down 16 percent and beef revenues fell 3.1
Economic growth in the company's three main export regions -
the Middle East, Asia and the Americas - was either slowing or
modest in the second quarter, which had an impact on overall
exports that account for 46 percent of total sales for BRF.
The Brazilian real weakened about 10 percent against the
dollar during the second quarter.