Opinion – Marcos de Vasconcellos: In the country of the bone queue, slaughterhouse is good business


The images of people digging through piles of carcasses in search of food and of supermarkets selling bones on trays have, not without reason, been highlighted in Brazilian and international newspapers. It is in this same Brazil that slaughterhouses have given impressive results on the Stock Exchange.

While the Ibovespa, the main indicator of the national stock market, accumulated a fall of 12.2% in the year, the shares of Marfrig (MRFG3) more than doubled in price, rising 103%. Those of JBS (JBSS3) are not far behind, with a rise of 70%, and shares of Minerva (BEEF3) rose a little less than 15% in the same period.

Before anyone repeats that saying that “while some cry, others sell handkerchiefs”, it is important to make it clear that this is not the result of new revenue lines from the sale of bones or carcasses. It turns out that the same factor that accelerates inflation and takes food off Brazilians’ plates increases company exports: the rise in the dollar.

With the real at a bargain price (an offer by the government that seems to strive to generate an unsafe business environment, with maneuvers to break the spending ceiling and threats to the autonomy of state-owned companies), exporters, who receive in dollars, are left with beautiful bills and please the market.
According to results released this Thursday (4/11), Minerva hit record revenue in the last quarter, reaching the level of R$ 78.4 billion. And 69% of consolidated revenue came from exports.

By revealing its numbers, by the way, the company announced the payment of another R$ 200 million in dividends to its shareholders, which is about 45% of the accumulated profit between January and September. That’s 35 cents for each share.

The explanation for the good result (43% above the same period in 2020) is given by its CEO, Fernando Galletti de Queiroz: “This is a reflection of the geographic diversification of Minerva Foods, which allows us to quickly arbitrate markets, reducing risks, volatility and increasing operational and financial efficiency”. In other words: the good result is due to being outside Brazil.

In Marfrig’s most recent results, released on the 27th, the logic is the same. The growth in sales in North America is explained by the reopening of the economy, advances in vaccination against Covid-19 and financial incentives from the federal government.

In Brazil, recalls the chairman of the board of directors of the company, Marcos Antonio Molina dos Santos, the demand for beef protein is the lowest in almost 30 years, according to the IBGE (Brazilian Institute of Geography and Statistics).

It is worth noting that Marfrig also anticipated the payment of more than R$958 million in dividends to its shareholders.

At JBS, the expectation is of superlative numbers, again. The results will be released on the 10th and the company’s strong presence abroad, including recent acquisitions of companies already well established in markets such as Australia, United Kingdom and Germany, is strongly reflected in the valuation of its shares.

The three slaughterhouses make it clear how it is possible, even with shares of national companies and on the Brazilian stock exchange, to reduce the exposure of an investment portfolio to the so-called Brazil risk and its ills, which are so clear in the sad lines of the bone.


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