In my recent update on BRF SA (BRFS), I noted that the near-term outlook for this large Brazilian poultry and packaged food producer was not great, as the company was getting squeezed by high costs and limited consumer purchasing power. Fourth quarter results amply demonstrated those pressures, though the halal and direct export operations showed better strength.
While the fourth quarter results and management commentary don’t change my outlook all that much, another development is more significant – that of large shareholder Marfrig (OTCPK:MRRTY) apparently looking to leverage its ownership stake and take a much more direct role in the company. Whether this will lead to a merger down the road remains to be seen, but at this point I don’t see much downside risk to more involvement from Marfrig.
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