Research Update: Marfrig Global Foods S.A. Outlook Revised To Positive On Improved Cash Flows; 'BB-' Ratings Affirmed

Marfrig Global Foods S.A.'s operating performance has improved given positive export profits from South America and higher spreads in North America in the second quarter of 2020. U.S. domestic meat prices have skyrocketed because Marfrig's large U.S. competitors had production disruptions in the period because of a large number of COVID-19 infections. In addition, the weak Brazilian real boosted EBITDA and cash flows of exports from Brazil and cash flows from subsidiary National Beef, which make up more than 80% of EBITDA. On Oct. 15, 2020, S&P Global Ratings revised its global and national scale outlook on Marfrig to positive from stable. We also affirmed the 'BB-' global scale and 'brAA+' national scale issue-level ratings and affirmed our '3' recovery

...- Marfrig Global Foods S.A.'s operating performance has improved given positive export profits from South America and higher spreads in North America in the second quarter of 2020. U.S. domestic meat prices have skyrocketed because Marfrig's large U.S. competitors had production disruptions in the period because of a large number of COVID-19 infections. - In addition, the weak Brazilian real boosted EBITDA and cash flows of exports from Brazil and cash flows from subsidiary National Beef, which make up more than 80% of EBITDA. - On Oct. 15, 2020, S&P Global Ratings revised its global and national scale outlook on Marfrig to positive from stable. We also affirmed the '##-' global scale and 'brAA+' national scale issue-level ratings and affirmed our '3' recovery ratings, which estimates a recovery value between 50%-70%. - The positive outlook reflects an at least one-in-three of a chance of an upgrade in the next 12 months if the company sustains its robust free cash flow generation and uses...

Research Update