BRF (BRFS) had plenty of challenges in the second quarter, the most prominent being COVID-19, but also higher production costs, increasing competition with the Brazilian processed food market, and increasing competition in global bulk poultry. All told, relative to expectations and the scale of the challenges, while BRF did miss by a bit on the EBITDA line, I’d call it a good quarter on balance.
I remain concerned about the risks from greater in-market competition in Brazilian processed food and increasing global chicken export supply. I do expect high single-digit revenue and FCF