Saturday, October 1

Brazilian food processor BRF CEO resigns, shares rise

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SAO PAULO — Brazilian food processor BRF SA said on Tuesday that chief executive Lorival Luz has resigned and will be replaced by Miguel Gularte, a top executive at meatpacker Marfrig Global Foods SA.

Shares in poultry and pork processor BRF were around 6% higher in early trading in Sao Paulo after the announcement.

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BRF said the move does not reflect an intention to merge the two companies.

Marfrig, which owns 33.27% of BRF, has said it is only interested in a passive stake in BRF.

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“We see the appointment of Miguel Gularte as CEO of BRF as unexpected,” XP analysts said in a note, highlighting the fact his experience comes from the beef sector.

Still, XP believes Gularte “should be able to make BRF more agile, removing discomforting inertia that was responsible for lost opportunities in BRF’s past.”

BRF, unlike bigger rivals JBS SA and Marfrig, does not process cattle.

Luz’s replacement comes after BRF reported a wider-than-expected loss in the second quarter, which was partly attributed by management to non-recurring events.

BRF, owner of well known brands Sadia and Perdigao in Brazil, has been reeling from the impact of high cost inflation. It makes most of its sales in the domestic market, unlike rivals such as JBS and Marfrig, which own plants in countries like the United States.

Gularte was chief executive of Marfrig until today’s announcement. Marfrig more than doubled profit in the second quarter thanks to the strength of its US beef business.

At Marfrig, Gularte will be replaced by Rui Mendonça, the company said in a separate statement. Shares in Marfrig were up 3% in morning trading. (Reporting by Gabriel Araujo and Ana Mano; Editing by Kirsten Donovan and Jane Merriman)