Standard&Poor's Rating Services' ratings on Minerva S.A. (Minerva) reflect the company's operations in the volatile and highly competitive global meat industry; potential trade restrictions and sanitary risks, which could have a significant effect on the company's operations given that exports are fairly concentrated in Russia and Europe; and Minerva's more volatile and slightly weaker margins, compared with local peers, resulting from its typical business strategy (extensive purchase of meat parts for fresh beef exports). Minerva's highly leveraged capital structure and relatively weak cash flow generation were also incorporated into the ratings. These negative rating factors are partly compensated by Minerva's low-cost position, Brazilian peers, and some operational flexibility to produce 'made-to-order' products because it has a higher deboning
