BRF(BRFS) - 2024 Q1 - Quarterly Report

Financial Performance - In Q1 2024, the international segment reported net operating revenues of R$6,484 million, a 5.5$6,162 million, a 4.0% decrease year-over-year and a 16.6% decrease quarter-over-quarter[38]. - Net revenue for 1Q24 reached R$13,376 million, a 1.4$13,191 million in 1Q23[90]. - Net sales for Q1 2024 reached $10.87 billion, a decrease of 9.4$11.99 billion in Q1 2023[178]. - Gross profit for Q1 2024 was $2.22 billion, down from$2.28 billion in Q1 2023, reflecting a gross margin of 20.4%[178]. - Adjusted EBITDA for Q1 2024 reached R$2,117 million, up 248.8$594 million in 1Q24, a significant recovery from a net loss of R$1,024 million in 1Q23, reflecting a 12.2 percentage point improvement in net margin to 4.4$434 million, compared to a loss of $1.00 billion in Q1 2023[181]. Cost Management - Cost of Goods Sold (COGS) decreased by 11.7$10,153 million in 1Q24, reflecting a reduction in unit costs driven by lower grain prices[96]. - Financial expenses decreased to $931 million in Q1 2024 from$1.06 billion in Q1 2023, indicating improved cost management[178]. - Net Financial Expenses decreased to 538 million RS, down 37.5% from 860 million RS in Q1 2023[200]. - The BRF+ efficiency program generated accumulated gains of R$438 million in 1Q24, with approximately R$340 million attributed to cost reductions[99]. Market Expansion and Product Development - In the Halal market, the company experienced a 12.4% quarter-over-quarter growth in sales volume for processed products, achieving the highest historical market share[13]. - The company launched 20 new products globally in Q1 2024, including a significant return to the British market[24]. - The company anticipates continued market expansion and new product development initiatives in the upcoming quarters[180]. Operational Efficiency - Operating cash flow improved to R$2,048 million in 1Q24, an increase of R$1,176 million from 1Q23, driven by better operational performance and inventory management[141]. - The company achieved a cash conversion cycle of 4.7 days in 1Q24, a reduction of 2.8 days year-over-year, reflecting improved efficiency in inventory turnover[142]. - The average sales price increased by 3.5% year-over-year, contributing to the overall revenue growth despite a 7.3% quarterly decline due to seasonal effects[89]. Financial Position - Total gross debt decreased to R$19,414 million as of March 31, 2024, down 0.9$19,593 million on December 31, 2023[166]. - Net debt reduced to R$9,016 million, reflecting a 4.8$9,475 million in the previous quarter[167]. - The company reported an outstanding balance of R$889,002 related to credit rights as of March 31, 2024, down from R$1,072,964 on December 31, 2023[51]. - Total current and non-current receivables were reported at R$741,759 as of March 31, 2024, down from R$767,873 on December 31, 2023[50]. Sustainability and Corporate Responsibility - The company improved its Sustainalytics rating, becoming the best-ranked in its sector among over 20,000 companies[195]. - The company was awarded the 'Green Label Industries' seal for good environmental practices at its Kezad plant in the UAE for the second consecutive year[196]. - The 2023 Sustainability Report includes a complete mapping of emissions from the entire supply chain, aligned with global reporting standards[197]. Shareholder Value - Total equity increased to R$15,228,142 million from R$14,923,428 million, reflecting a positive growth in shareholder value[175]. - Dividends declared during the period were 97 thousand Brazilian Reais, indicating a return to shareholders[183].