FORM 6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

dated November 13, 2012

  Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

3 ^rd QUARTER 2012 – 3Q12

      Net sales totaled R$ 7.2 billion, a growth of 14.3% in relation to 3Q11, revenues being generated from the following business segments: domestic market (7.4%); exports (26.0%); dairy products (4.8%) and food service (8.0%), these results reflecting the efforts taken to offset the impact of the TCD process.

      The businesses involving meats, dairy products, other processed products and remaining sales represented 1.6 million tons, a 4.3% increase, this despite sales of assets and the discontinuation of certain categories in line with the agreement with CADE.

      Gross profit totaled R$ 1.5 billion, a 5.0% decrease due to the pressure of recurring costs during the quarter. 

      EBITDA reached R$ 565.1 million, 21.8% less than 3Q11 due to the squeeze on margins still being experienced in the markets, the result of a combination of spiking costs, a gradual improvement in export business and the impact of asset transfers and discontinuation of certain product categories.

      Net income was R$ 90.8 million against R$ 365.0 million recorded in 3Q11 but already indicating a positive evolution of R$ 84.5 million in relation to 2Q12.

      Financial trading volume in BRF’s shares reported an average of US$ 75.5 million/day in the quarter, 15.9% more than 3Q11.

Accumulated 2012 – 9M12 (January to September)

      Net sales amounted to R$ 20.4 billion, a growth of 9.5%, reflecting good performance in sales for BRF’s chosen business segments.

      The meats, dairy products and other products businesses and other sales recorded volumes of 4.7 million tons, a 3.8% increase. 

      Gross profits totaled R$ 4.4 billion, 7.5% lower due to the pressure on raw material costs and the CADE process-related costs - not fully covered by higher sales revenue. However, price adjustments have been made in order to recovery margins to be effective as from the fourth quarter 2012.

      EBITDA reached R$ 1.7 billion, 28.5% less than the for 9M11, representing an EBITDA margin of 8.2%.

      Net income was R$ 250.5 million against a net income of R$ 1,246.4 million for 9M11– a 79.9% reduction with a net margin of 1.2% against 6.7% by virtue of the pressures resulting from operating performance and accumulated financial expenses.

      Financial trading volume in BRF’s shares reached an average of US$ 76 million/day for the year , 16% lower than 3Q11.

 (The changes commented in this report are comparisons with the 3 ^rd   quarter of 2012 compared with the 3 ^rd   quarter in 2011, or with the  accumulated January to September 2012 period compared with the accumulated January to September  2011 period unless specified on another comparative basis).

Brazilian Exports

Beef and pork export volumes recorded a significant recovery in 3Q12 versus 2Q12 and 3Q11. The increase in revenues (measured in US$) in the compared periods was also notable with the exception of a decline in revenues from beef exports in 3Q12 versus 2Q12. However, chicken meat shipments in volume and revenue terms in 3Q12 (measured in US$) posted a decrease in 3Q12 versus 2Q12 and 3Q11.

Chicken meat exports reached 935 thousand tons in 3Q12, 7.7% below 2Q12 and 3.5% lower than 3Q11. Quarterly revenue (measured in US$) was 7.0% down on 2Q12 and 1.7% less than 3Q11. Volumes to Africa continue to report the fastest growth for the accumulated period for the year (+34.0% Jan-Sep/12 vs Jan-Sep/11), in addition to some Asian countries such as China (+25.0% on the same comparative basis). On the other hand, shipments to the Middle East registered a decline for the year to date of 4.8% (Jan-Sep/12 vs Jan-Sep/11), as did Saudi Arabia (-3.4% on the same comparative basis). The decline in export volume to Venezuela and Argentina during the year also negatively impacted chicken meat shipments to the Americas for the accumulated nine month period 2012 (-24.3% in Jan-Sep/12 vs Jan-Sep/11).

Pork shipment volumes reached 159 thousand tons in 3Q12, a 9.9% increase over 2Q12 and 29.2% more than 3Q11. Revenue (measured in US$) for the quarter represented an increase of 7.6% compared with 2Q12 and 21.4% versus 3Q11. The Ukraine continues to be the leading importer for the year, replacing Russia, which still reports a decrease of 16.3% for the accumulated total Jan-Sep/12 vs Jan-Sep/11. Volumes for this year to Angola and Singapore continue to exceed 2011 levels while it still remains for Argentina to show signs of a recovery (fall of 43.3% for the accumulated period Jan-Sep/12 vs Jan-Sep/11).

Overseas beef sales continue to turn in good results in terms of export volume, reaching 339 thousand tons in 3Q12, 1.1% more than 2Q12 and 24.1% above 3Q11. However, quarterly revenue (as measured in US$) fell by 5.4% versus 2Q12, in spite of a 10.7% increase compared with 3Q11. Greater export volume during the quarter was principally due to the recovery in such markets as Iran (from 5.4 thousand tons in 2Q12 to 37.8 thousand tons in 3Q12) and Egypt (from 28.4 thousand tons in 2Q12 to 46.6 thousand tons in 3Q12).

Raw Material

US corn prices rose in 3Q12 by 26.3% in relation to 2Q12 and were a further 12.4% higher than 3Q11 set against a scenario of the worst drought in the United States for the last 15 years – representing a loss of nearly 100 million tons of production in relation to the preceding year (-13.4%). Since in the past few years, the United States has accounted for about 65% of world corn exports, importing countries were obliged to seek alternative sources to guarantee supplies, importing corn from Brazil, the Ukraine and Argentina. As a result, in line with trends in international markets, in 3Q12 Brazilian corn prices were 26.5% on average higher than in 2Q12  and 12.1% up on 3Q11. Corn exports should amount to 17.5 million tons in 2012 (a record). In these circumstances, BRF took the initiative to anticipate purchases and optimize inventory management to ensure competitively priced supplies.

In the case of soybeans, the impact of the drought in the US has been less dramatic given that the development cycle of the crop is different from corn. In the USA, soybean meal prices in 3Q12 were 24.3% higher than 2Q12 and 45.6% higher than 3Q11, since the production of soybeans in the United States reported a decline compared with 2011 (-7.5%) at a time when inventory remains low in Brazil and Argentina (in the middle of offseason period). In spite of lower growth than previous

years, Chinese demand for soybeans remains strong, thus giving support to current price levels in the international market. In Brazil, soybean meal prices in 3Q12 rose 38.0% as compared with 2Q12 and 104.1% in relation to 3Q11, reflecting the fragile supply situation for soybeans in the country where output fell 11.9% but exports declined only 5.3% in relation to 2011. BRF has been proactive in these circumstances by signing long-term agreements with suppliers, thus attenuating the negative impact of the price hike of the commodity on the meats production chain.

Investments

Investments in Capex during the quarter amounted to R$ 419 million, a 83.7% increase over the same quarter for 2011 and allocated to projects involving growth (188% higher), efficiency (31% down) and support (125% increase), besides R$ 121.2 million directed to biological assets (28% less than in 2011). Additionally, we incorporated the acquisition of Quickfoods in Argentina, an asset arising out of a swap for assets in the domestic market (TCD process).

For the nine-month period, investments totaled R$ 1.7 billion, taking into account investment in maintenance, expansion and acquisitions, representing a growth of 82% in relation to the same period in 2011 when investments were constrained as the Company awaited the decision from CADE (Administrative Council for Economic Defense) in order to proceed with the implementation of the Long-Term Strategic Plan – BRF 15 based on organic growth and growth by acquisition.

Investments - R$ million

New Businesses – Federal Foods – On October 4, 2012, BRF announced that it had signed a binding offer to acquire a 49% stake in Federal Foods Limited, with head offices in Abu Dhabi, United Arab Emirates (UAE), through BRF’s subsidiary in Austria. The remaining shareholding stake in Federal Foods will be held by Al Nowais Investments, the current controlling company of Federal Foods. Established in 1991,  Federal Foods is a leading food company in the United Arab Emirates, catering to a full spectrum of retail, food service and wholesale clients. The company operates 6 branches in the UAE and 1 in Qatar with over 1,350 employees and a logistics fleet of more than 260 trucks and vans for the delivery of chilled and frozen products.

In 2011, Federal Foods reported net sales of US$ 266 million and 92 thousand tons of commercialized products. The company has been a distributor of Sadia products in the UAE for more than 20 years. In addition, it distributes a range of chilled, frozen and dry products pertaining to other brands and suppliers. Currently, BRF products account for about 65% of Federal Foods’ net sales. BRF reiterates its intention to continue the partnerships built up over time between Federal Foods and current suppliers. BRF is to commercialize its portfolio of products in the UAE through Federal Foods, including the Sadia and Perdix brands as well as the portfolio of processed products to be produced by the plant which is to start operations in 2013.

This acquisition is in line with BRF’s strategic plan to internationalize the Company by accessing local markets, strengthening BRF’s brands and distribution and expanding its product portfolio in the Middle East. The investment in this acquisition will amount to US$ 36 million in exchange for a 49% equity stake in Federal Foods.  BRF will have management control as established in the shareholders’ agreement and will consolidate the acquired company’s financial statements. The conclusion of this transaction is contingent on the successful completion of the due diligence process.

JV Carbery – BRF and Group Carbery announced a formation of a 50/50 whey processing joint venture.  The $50 million investment will use Carbery’s innovative technology to process whey generated at BRF’s cheese manufacturing facilities. The venture is aligned with BRF´s strategic objective to be a leading player in the Brazilian cheese market.

The joint venture will house a state of the art manufacturing plant to produce added value nutritional ingredients sourced from whey, a byproduct from cheese manufacturing. These ingredients are utilized by leading consumer brands in baby food and sports nutrition, among others uses.  The construction of the processing facility is planned to commence immediately and it will be commissioned in 2014.

Production

A total of 1.4 million tons of food was produced in 3Q12, a volume 3.2% less than reported in 3Q11 due to the reduction of volumes transferred under the TCD process involving meats and other processed products and by the reduction in dry line (UHT milk) volumes. In the dairy product segment, BRF is focusing on growing the refrigerated products business.

Quickfoods production in Argentina was incorporated into total meat volume output in the quarter.

In 2012, 283 new products were launched with a focus on portfolio expansion, on brand and category repositioning and the creation of value. In the third quarter, we launched 115 new products, which: Food Service - 18; domestic market – 51; exports – 31; and 15 in the dairy product segment.

Domestic Market

Sales to the domestic market were R$ 3.1 billion, a 7.4% increase 1.2% but with lower volumes and average prices 8.7% higher. Average costs rose 13.2%, reflecting an operating profit of R$ 183.9 million in this segment, a 35.7% decline with operating margins oscillating from 9.9% to 6.0% in the quarter.

Operating results in the domestic market continued to be squeezed by the increase in costs in relation  to the preceding year (prices of the leading raw materials and grains) as well as other direct inputs, to some extent offset by the partial passing on of cost rises to prices during the quarter. There was also an increase in commercial costs and expenses – principally a reflection of the TCD process: 1) revision of lines and production transfers; 2) loss of volume transferred to Marfrig; 3) partial suspension of some categories; 4) increase in product mix; 5) increase in the transitional logistics network; 6) investments in product innovation.

For the accumulated nine months, sales revenue amounted to R$ 9.0 billion, a 8.3% increase. However, the increase in revenue was proportionally insufficient to entirely offset cost and expense pressures. Volumes practically remained unchanged in spite of the TCD process, implemented in the quarter and cutting output volume by 175 thousand tons. Average prices and costs were 8.7% and 16.3% higher, respectively, translating into a 22.1% lower operational result. As a result, the operational margin for the domestic market segment fell from 10.0% to 7.2%

To support the recovery of growth in this market following the full implementation of the TCD process, 51 new products were launched in the domestic market in the quarter: Sadia:  Mini-Pizza ( Brotinho ); Whole-wheat Lasagna; Smoked Chicken Sausage; Beef Cuts; Perdigão: re-launch of Claybon margarine; Rump Steak, Turkey and Soy hamburger, breaded chicken; diced chicken.

Market Share – YTD12% - Value  

Exports

In 2012, hog and poultry farming faced a challenging trading environment due to oversupply in some importing countries, aggravated by the high cost of grains together with  drought conditions in the USA, combined with less than favorable harvest conditions in South America, Russia and Australia, all of which impacted the food sector globally.

In spite of the complex scenario, the situation prompted an increase in international prices across the board to the benefit of overseas business in 3Q12. In the quarter, exports amounted to 628.3 thousand tons, 11.7% higher in volume terms in relation to 3Q11. Average prices have already seen a recovery, rising 12.8% and 10.7% when compared with 2Q12. This is not only due to result of increasing production costs and consequently the need to recuperate margins but also a reflection of the running down of inventories in the Middle East and Eurasia markets. The average cost was 21.3% higher – still at very high levels, once more at 0.8% squeezing operating margins resulting in a fall of 4.6 percentage points in operating margins compared with 3Q11. The operating result was R$ 24.5 million, a 81.5% reduction.

Thus, in spite of the innumerous difficulties during the year, the outlook is now  more promising. In some markets variations in seasonal demand favor price increases as is the case with China where preparations are already afoot for the Chinese New Year. In other regions such as Europe the approach of winter represents an historically more constrained period in terms of price adjustments, although the worldwide increase in production costs has tended to allow the re-composition of prices – a situation which has already begun in various countries.

The Company reported the following scenario for its principal markets during the quarter:

Middle East – While volumes were 12.1% higher in 3Q11, export revenue recorded an increase of 46.5%. Indeed, the market has managed to recover from the aftermath of the Arab Spring. The good performance also reflects the strategy of increasing the penetration of the Sadia brand in the Middle East. The announcement of the acquisition of an equity stake of 49% in the capital stock of Federal Foods in Abu Dhabi, will bring fresh vigor to the Company’s distribution business in the UAE.  

Far East – Just as in the case of the preceding quarter, the decline in exports to Hong Kong continued to be mitigated by the increase in exports to China, reflecting a strategy of capturing better returns from the operation. Export volume was 15.5% higher than in 3Q11. Export revenues accompanied this trend in volume and rose by 10.7%. The prospects for business activity in the region are sustained by the approaching Chinese New Year celebrations – a period representing a seasonal peak in terms of both volume and also prices – as well as the liberation on the part of the Chinese authorities of new pork and poultry processing units for exports to the Chinese market. Locally held inventory in the Japanese market continues to place a drag on recovery in performance for this region.

Europe – The economic crisis in Europe brought difficulties to the market throughout the year, although the need for a global increase in prices has already impacted the region as well. While there was a higher of 5.4% in volume compared with 3Q11, revenues remained stable. Another factor contributing to the region’s performance is the focus on local production of higher value-added items (Plusfood).

Eurasia – Despite the Russian trade ban on the large majority of Brazilian plants, the market has been showing a good performance with a 100.6% growth in revenue, albeit against 86.3% higher volumes. The Company has been refocusing its presence to other consumer markets. The Ukraine has been reaching the levels of one of the largest pork importers.  

South America – The end of the trade barriers on pork exports to Argentina and the consequent recovery in shipments has brought very positive results  for the market. Additionally, business with Argentina has gained in relative importance in the region with the incorporation of the activities of Quickfoods, revenue having grown by 47.5% although volumes increased 32.4%.

Africa and other countries - In Africa, the Company reported good business with the growth in revenue despite a decline in export volume, the result of the strategy of enhancing the portfolio in the region. A highlight was the Libyan market in which the prices of whole chicken matched levels practiced in some regions of the Middle East. An expected highlight for this year-end is the recovery in chicken breast exports to South Africa. On the other hand, the Venezuelan market remained close. As a result total volumes for Africa and other countries declined 26.6% as did revenue by 17.6%.

Exports by Region

Dairy Products – Dairy product revenue totaled R$ 692.3 million, an increase of 4.8% with volumes up by 2.7% with average prices improving by 2.1% while average costs were 4.0 higher. Operating margins recovered year-on-year from a fall of 3.2%  to 0.5% compared with 3Q11  although operating results for the business remained negative at R$ 3.7 million, principally a reflection of dry line products – UHT milk.

For the accumulated period, revenue from dairy products reached R$ 2.0 billion – 5.6% over the preceding year, with volumes 1.0% up and average prices and costs higher by 4.6% and 4.5%, respectively.  Consequently, the operating result was a negative R$ 1.8 million against R$ 10.9 million in 9M11.

New product launches and enhancement of the refrigerated products mix continue to be a priority as a means of ramping up the segment’s results. The Company launched 15 new products in the quarter.

Food service – Revenues for this segment  reported R$ 354.0 million in the quarter – 8.0% higher, on 2.6% greater volume, an improvement of 5.3% in average prices against  10.5% higher average costs, thus reducing the operating margin from 17.7% to 7.7%, the operating result totaling R$ 27.4 million against R$ 57.9 million (52.7% down).

Accumulated nine-month revenue rose 9.2% to R$ 1.0 billion, on 5.7% higher volume, reaching an operating margin of 9.3% against 14.7% in 9M11 and an operating result of R$ 98.2 million – 31.2% down on 9M11.

Weaker operating results from food service continue to reflect the diversion of in-natura products from the export market, thus altering the sales mix, as well as one-off deceleration in the segment, the result of greater competition for Brazilian disposable household incomes.

The Company launched 18 products in the food service line:  Subway Salami; Breaded Products; Platform pork ribs; 9 special KFC cuts – Chile; Dobon Beef; Sweet Milk; KFC Canada and England filet steaks. Sadia and Perdigão Kits – Collections 2012 (3Q12).

Net Sales –  BRF reported net operating sales of R$ 7.2 billion in the quarter, an increase of 14.3%, the result of organic growth, the incorporation of Quickfood, Argentina and an expanded portfolio thanks to innovation with the launch of various products and categories designed to cushion the impact of asset transfers in the quarter in line with  the agreement with CADE (TCD).

For the first nine month of the year, revenues increased 9.5%, reaching R$ 20.4 billion, representing the production and commercial teams efforts to overcome the adversities, in addition to complex factors as: the adverse international scenario and a reduction in volume of assets (plants and distribution) transferred to third parties under the TCD process as well as the discontinuation of specific categories of the Perdigão and Batavo brands as announced in a material fact.

Breakdown of Net Sales 3Q12(%)

Cost of Sales – Cost of sales  rose 20.9% in relation to 3Q11, recording R$ 5.7 billion. The cost of sales reported an increase proportionally greater than sales revenue, squeezing margins during the quarter. The principal impacts on costs of products sold were: 1)  the significant increase in the cost of the principal raw materials – corn and soybeans due to failure of the American grain crop; 2)  industry-wide readjustments as a result of collective wage bargaining; 3)  an increase in items restated against the foreign exchange rate such as: packaging, freight, vitamins; 4)  temporary spike in  production costs due to the breakup of certain parts of the Company with the implementation of the TCD process.

For the first nine months of the year, selling costs were R$ 16.0 billion, registering an increase of 15.2%, reflecting the higher costs of the leading raw materials and other production costs. In addition to cost pressure on raw materials, we are incurring transitory costs (plants running below maximum capacity and lower productivity) from the implementation of the TCD.

Gross Profit and Gross Margin – Gross Profit amounted to R$ 1.5 billion, a 5.0% reduction in the quarter with a gross margin 4.3 percentage points lower than reported for 3Q11,  declining from 25.5% to 21.2%. In spite of the positive commercial  performance in sales, margins remained under pressure from rising costs. For the accumulated nine-month period, Gross Profit reached R$ 4.4 billion, a fall of 7.5%, equivalent to a gross margin of 21.4% against 25.3%, also squeezed by higher production costs, albeit mitigated by the gradual recovery in performance reported by the  principal markets for the Company’s operations.

Operating  Expenses – Thanks to its efforts to reduce overall expenses, BRF was able to reduce operating expenses by 0.7 percentage points in the quarter from 17.3% to 16.6% of net operating sales, reporting a nominal increase below the gain in sales revenue.

Commercial expenses as a percentage of net sales remained stable, although there was a growth of 31.4% in variable expenses due to: 1)  investments in the development of new lines and products (innovation), product launches and marketing campaigns; 2)  increase of operations in the logistics chain, also significantly impacted by the TCD process (transfer of assets and repositioning of the  portfolio and distribution channels); 3)  port and transportation employee strikes at the beginning of the quarter.

Administrative expenses and fees fell 20.9% due to the simplification of BRF’s administrative intra-group  structure and the lower disbursements in consultancy fees in the quarter (In 3Q11, significant payments were made to consultancies advising the Company on negotiations with CADE for approving the merger).

In 9M12, operating expenses totaled R$ 3.4 billion with an increase of 12.2%, notably impacted by selling expenses which increased 14.8% and mitigated by administrative expenses which fell 10.1% for the aforementioned reasons and also reflected in the quarter’s results.

Other Operating Expenses – The increase of 61.7% covers costs with the pre-operational phase of the new industrial units, insurance claims, provisions for tax risks and results of divestments under the TCD in other operating expenses as well as revenues from the  reversal of provisions, recovery of expenses and leasing with third parties. In line with IFRS regulations, expenses with profit sharing are also booked under this item.

For the first nine months of 2012, there was a 0.4% decline in this item due to gains in third party leasing, with the leasing of the Carambei-PR facility to Marfrig. The key factor in this item is the result of the divestment of assets under the TCD process (R$ 30.3 million in 3Q11 and R$ 104.4 million for the year to date) due to the non-cash effect and corresponding to the value of the evaluation of the asset sales in relation to their book value.

Operating Result before Financial Expenses and Operating Margin – In the light of the above explanations, the operating result before net financial expenses reached R$ 232.1 million in the quarter –49% down in relation to 3Q11 from an operating margin of 3.2% net sales against 7.2%. The 4.0 percentage point decrease is due to a combination of adverse factors during the quarter: inflated local inventory in the Japanese market; pressure on variable commercial costs and expenses; and extraordinary expenses due to the transitory process of transferring assets in accordance with the provisions of the TCD.

These factors, associated with the gradual recovery in exports and the loss of revenue from divested assets (TCD) also explains the operating result against financial expenses reported in the accumulated period  of R$ 780.7 million, 47.7% below the result reported in the same period of 2011, with a squeeze of 4.2 percentage points on the reported operating margin.

Financial Result – Net financial expenses amounted to R$ 117.2 million in the quarter, registering a fall of 37.2%, that is, a gain of R$ 69.3 million when compared to 3Q11, which reported non-cash effects of currency variation  on liabilities.

In 9M12, net financial expenses totaled R$ 479.7 million, a 63.1% increase, especially due to higher debt levels as a result of the currency effect and the need to allocate cash to support investments in Capex and working capital , due to reduced cash generation in the period.

Financial expenses due to exchange variation were 12% of net financial expenses during the quarter and 37% in 9M12, although this is not reflected in any cash disbursement.

In the light of the high level of exports, the Company conducts operations with the specific purpose of currency hedging. In accordance with hedge accounting standards (CPC 38 and IAS 39), financial derivatives (for example: NDF) and non-derivative financial instruments (for example: foreign currency debt) are used for conducting  hedging operations and concomitantly, to eliminate the respective unrealized foreign exchange rate variations from the income statement (under the Financial Expenses line).

The use of non-derivative financial instruments for foreign exchange cover, continues to permit a significant reduction in the net currency exposure in the balance sheet, resulting in substantial benefits through the matching of currency liability flows with export shipments and therefore contributing to a reduction in the volatility of the financial result.

On September 30, 2012, the non-financial derivative instruments designated as hedge accounting for foreign exchange cover amounted to USD 631.4 million, and a proportional reduction in book currency exposure of the same value. In addition, the financial derivative instruments designated as hedge accounting according to the concept of a cash flow hedge for coverage of highly probable exports, totaled USD 1,312 million + EUR 199 million + GBP 61.9 million and also contributed directly to the reduction in currency exposure. In both cases, the unrealized result for foreign exchange rate variation was booked to shareholders’ equity, thus avoiding the impact on the Financial Expenses.

The Company’s net debt was R$ 7.1 billion, 32% more than reported for December 31, 2011, resulting in a net debt to EBITDA ratio (last twelve months)  of 2.76 times with a book currency exposure of US$ 519 million.  

Net Debt – R$ million

Income Tax and Social Contribution – Income tax and social contribution totaled a negative R$ 26.1 million in the quarter against a positive R$ 87.7 million in 3Q11 due

to differences in tax rates on earnings of foreign subsidiaries and the foreign exchange translation effect on overseas investment.  This increase is a combination of a higher tax base and smaller adjustments for other taxes which compensate the  tax benefits accruing to payments of interest on shareholders’ equity.

For the full nine months, income tax and social contribution represented a negative R$ 48.2 million against a positive R$ 43.4 million in the same period of the previous year due to the differences in tax rates on results for the overseas subsidiaries and the  foreign exchange translation effect on overseas investment . 

Participation of non-controlling shareholders – The result of R$ 2.1 million against R$ 8.9 million in 3Q11 recorded for this item reflects the consolidation of results of the subsidiaries acquired in Argentina through Avex and as from 3Q12, the incorporation of the results of Quickfoods added to the results of the Al Wafi and Plusfood subsidiaries among others. 

Net Income and Net Margin – In the light of the foregoing, BRF reported net income of R$ 90.9 million in the quarter, equivalent to a net margin of 1.3%, a year-on-year reduction of 75.1% due to narrower margins in the quarter, in turn a reflection of production costs which rose proportionally faster than sales revenue. For the accumulated period for the year, the Company was able to report a net income of R$ 250.5 million, 79.9% down on the same period 2011 with net margin at 1.2% compared with 6.7% and reflecting weaker performance posted for the principal business segments and financial expenses impacted by currency variation.  

EBITDA – EBITDA (operating cash generation) reached R$ 565.2 million, a 21.8% decline, recording an EBITDA margin of 7.9% against 11.5% in 3Q11, down by 3.6 percentage points. In 9M12, accumulated EBITDA was R$ 1.7 billion, 28.5% below the same item for 9M11, with an EBITDA margin of 8.2% against 12.5% reported for the same period in 2011, for reasons already explained above.

EBITDA - QUARTERLY  

*3Q09 Proforma

Shareholders’ Equity – On September 30, 2012, Shareholders’ Equity was R$ 14.2 billion against R$ 14.1 billion on December 31, 2011, a 0.6% increase and reflecting a 4.2% return on annualized investment.

Performance – Average daily financial volume traded on the BM&FBovespa  and NYSE was US$ 76  million, 16% below levels reported for 9M11, reflecting the high comparative base in 2011 due to the surge in trading volume in the Company’s shares/ADRs in the aftermath of CADE’s approval of the merger between BRF and Sadia. Nevertheless, the financial volume for the quarter was still double the Company’s historical average. The quarterly performance was a 15.2% return on shares and 13.9% on ADRs, well above the performance of the BM&FBovespa and NYSE stock indices.