BRF S.A. (NYSE:BRFS) Q3 2023 Results Conference Call November 14, 2023 8:30 AM ET

Company Participants

Miguel Gularte - Chief Executive Officer

Fabio Mariano - Chief Financial Officer

Conference Call Participants

Ricardo Alves - Morgan Stanley

Gustavo Troyano - Itau BBA

Leonardo Alankar - XP

Isabella Simonato - Bank of America

Thiago Duarte - BTG Pactual

Lucas Ferreira - JP Morgan

Operator

Good morning, ladies and gentlemen. Welcome to BRF's Q3 2023 Earnings Conference. This conference is being recorded and will be available for replay at the company's website, ir.brf-global.com, where the presentation slide deck can also be downloaded. All attendees are now connected in listen-only mode. Later, the call will be open for questions and further instructions will be provided.

Before moving on, we'd like to emphasize that forward-looking statements are based on BRF's management's beliefs and assumptions as well as currently available information. These statements may involve risks and uncertainties seeing as they relate to future events and therefore rely on circumstances that may or may not materialize. Investors, analysts and journalists must acknowledge that events relating to the macroeconomic environment, the industry and other factors may lead to materially different results than those expressed in set forward-looking statements.

Joining our conference today are Mr. Miguel Gularte, CEO and CFO, Fabio Mariano. I will now turn over to Mr. Gularte, who will begin the presentation. Please, Mr. Gularte, you may proceed.

Miguel Gularte

Good morning. I would like to thank everyone for attending our third quarter 2023 earnings call. Discipline in the execution of our BRF us efficiency plan has once again contributed positively to our performance. The company has been working consistently and improving its results every quarter. This period was largely characterized by the increased profitability of our processed food portfolio in Brazil, the downswing in product costs and the continued improvement of BRF plus. We strengthened our capital structure by enhancing our operations month after month and using the funds from our follow-on offering, which helped to reduce our financial expenses and leverage. Now I'd like to invite our CFO, Fabio Mariano, to go over our detailed results, after which I'll return for my final remarks.

Fabio Mariano

Good morning to everyone joining us on the initial slide, I'd like to highlight our main financial indicators for the third quarter, starting with net revenue, which came to BRL 13.8 billion. Our EBITDA was BRL 1.2 billion in the quarter. This gave us a 9% EBITDA margin for the period. Free cash flow performance nearly broke even with the best cash generation yet for the current year. On the working capital front, we continue to make significant progress with a reduced inventory of finished goods, unprocessed goods, in particular, which was offset throughout the quarter by the spike in corn inventory during the double crop harvest and the peak in commemorative goods inventory.