UPDATE 2-Brasil Foods posts Q3 profit on financial gains

* Net profit reached 211 mln reais in the third quarter

* Q3 '08 loss was 1.6 bln reais with Sadia fin losses

* Revenues drop to 5.3 bln reais vs 5.6 bln reais year-ago (Recasts with details, comments)

SAO PAULO, Nov 12 (Reuters) - Brazilian food maker Brasil Foods PRGA3.SAPDA.N said on Thursday third-quarter net income surged, reversing a loss a year earlier, after a strengthening real and record low borrowing costs helped trim debt-servicing costs.

The company, formed by the merger of Brazil's top two poultry and pork processors, Perdigao and Sadia, posted a net profit of 211 million reais ($121.3 million) compared with losses of 52 million reais in the year-earlier period.

The quarter's result compares with a proforma loss of 1.6 billion reais a year ago, mainly the byproduct of Sadia's heavy financial losses triggered by the unraveling of currency derivatives contracts.

Sadia, once Brazil's largest poultry and pork producer, announced in September 2008 losses of 760 million reais mainly from foreign exchange derivatives which were in excess of its need for export credit. The loss was bigger than its total 2007 profit.

An 11 percent gain in the Brazilian currency, the real (BRBY), during the quarter helped Brasil Foods slash the cost of servicing its dollar-denominated debt, said Financial Director Leopoldo Saboya.

"The negative impact we had on Sadia (last year), this time was positive," Saboya said in a press conference to discuss the results.

Net revenue in the quarter totaled 5.3 billion reais compared with 5.6 billion in the same period last year.

In May, Sao Paulo-based Perdigao agreed to acquire debt-laden rival Sadia to create a global industry leader with annual sales topping $10 billion. Brasil Foods will control a quarter of the global poultry market.

The takeover has been approved by European regulators but awaits approval in Brazil, where it faces serious regulatory scrutiny. (Reporting by Roberto Samora; Writing by Inae Riveras and Guillermo Parra-Bernal; Editing by Tim Dobbyn, Bernard Orr)