Indicate by
check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Indicate by
check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1):
Indicate by
check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7):
Indicate by
check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If “Yes”
is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.
This material
includes certain forward-looking statements that are based principally on current expectations and on projections of future events
and financial trends that currently affect or might affect the Company’s business, and are not guarantees of future performance.
These forward-looking statements are based on management’s expectations, which involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of which are beyond the Company’s control and any of which could
cause actual financial condition and results of operations to differ materially fom those set out in the Company’s forward-looking
statements. You are cautioned not to put undue reliance on such forward-looking statements. The Company undertakes
no obligation, and expressly disclaims any obligation, to update or revise any forward-looking statements. The risks and
uncertainties relating to the forward-looking statements in this Report on Form 6-K, including Exhibit 1 hereto, include those
described under the captions “Forward-Looking Statements” and “Item 3. Key Information — D. Risk Factors”
in the Company’s annual report on Form 20-F for the year ended December 31, 2012.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: August 14, 2020
|
|
|
|
|
BRF S.A.
|
|
|
|
|
|
By:
|
/s/ Carlos Alberto Bezerra de Moura
|
|
|
Name:
|
Carlos Alberto Bezerra de Moura
|
|
|
Title:
|
Chief Financial and Investor Relations Officer
|
EXHIBIT INDEX
INDEX
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
2
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
3
|
(in thousands of Brazilian Reais)
STATEMENT OF FINANCIAL
POSITION
|
|
|
Parent
company
|
|
Consolidated
|
|
|
|
|
Parent
company
|
|
Consolidated
|
ASSETS
|
Note
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
LIABILITIES
|
Note
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
4
|
|
4,469,307
|
|
1,368,980
|
|
9,671,275
|
|
4,237,785
|
|
Loans
and borrowings
|
15
|
|
3,935,263
|
|
3,033,034
|
|
4,071,950
|
|
3,132,029
|
Marketable
securities
|
5
|
|
309,460
|
|
396,994
|
|
337,183
|
|
418,182
|
|
Trade
accounts payable
|
16
|
|
5,958,687
|
|
5,270,762
|
|
6,725,495
|
|
5,784,419
|
Trade
and other receivables
|
6
|
|
6,578,951
|
|
6,153,937
|
|
2,848,634
|
|
3,090,691
|
|
Supply
chain finance
|
17
|
|
982,237
|
|
842,037
|
|
982,237
|
|
842,037
|
Inventories
|
7
|
|
3,447,795
|
|
2,786,147
|
|
5,103,218
|
|
3,887,916
|
|
Lease
liability
|
18
|
|
244,450
|
|
313,058
|
|
317,435
|
|
376,628
|
Biological
assets
|
8
|
|
1,803,882
|
|
1,545,127
|
|
1,882,925
|
|
1,603,039
|
|
Payroll,
related charges and employee profit sharing
|
|
|
964,760
|
|
754,032
|
|
1,008,666
|
|
825,254
|
Recoverable
taxes
|
9
|
|
371,098
|
|
274,480
|
|
609,955
|
|
473,732
|
|
Tax
payable
|
|
|
205,701
|
|
268,193
|
|
489,833
|
|
517,208
|
Recoverable
income tax and social contribution
|
9
|
|
60,688
|
|
40,291
|
|
93,781
|
|
152,486
|
|
Derivative
financial instruments
|
24
|
|
1,098,175
|
|
151,722
|
|
1,100,649
|
|
153,612
|
Derivative
financial instruments
|
24
|
|
237,757
|
|
193,740
|
|
244,362
|
|
195,324
|
|
Provision
for tax, civil and labor risks
|
21
|
|
1,135,183
|
|
1,081,103
|
|
1,139,238
|
|
1,084,308
|
Restricted
cash
|
|
|
1
|
|
296,294
|
|
1
|
|
296,294
|
|
Employee
benefits
|
20
|
|
87,996
|
|
87,996
|
|
97,688
|
|
95,919
|
Assets
held for sale
|
|
|
15,874
|
|
16,671
|
|
42,284
|
|
99,245
|
|
Advances
from related parties
|
30
|
|
8,926,155
|
|
5,364,164
|
|
-
|
|
-
|
Other
current assets
|
|
|
422,909
|
|
495,743
|
|
502,874
|
|
590,733
|
|
Other
current liabilities
|
|
|
226,488
|
|
329,166
|
|
952,824
|
|
512,591
|
Total
current assets
|
|
|
17,717,722
|
|
13,568,404
|
|
21,336,492
|
|
15,045,427
|
|
Total
current liabilities
|
|
|
23,765,095
|
|
17,495,267
|
|
16,886,015
|
|
13,324,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
LONG-TERM
RECEIVALBLES
|
|
|
|
|
|
|
|
|
|
|
Loans
and borrowings
|
15
|
|
17,730,549
|
|
13,395,970
|
|
20,791,601
|
|
15,488,250
|
Marketable
securities
|
5
|
|
14,728
|
|
14,891
|
|
415,456
|
|
307,352
|
|
Trade
accounts payable
|
16
|
|
7,718
|
|
12,347
|
|
7,718
|
|
12,347
|
Trade
and other receivables
|
6
|
|
63,237
|
|
71,029
|
|
63,237
|
|
71,029
|
|
Lease
liability
|
18
|
|
1,995,738
|
|
1,939,494
|
|
2,161,196
|
|
2,054,552
|
Recoverable
taxes
|
9
|
|
5,249,535
|
|
5,167,016
|
|
5,249,509
|
|
5,169,547
|
|
Tax
payable
|
|
|
182,924
|
|
190,257
|
|
182,924
|
|
190,257
|
Recoverable
income tax and social contribution
|
9
|
|
90,759
|
|
264,428
|
|
97,197
|
|
269,263
|
|
Provision
for tax, civil and labor risks
|
21
|
|
709,199
|
|
709,760
|
|
709,546
|
|
710,061
|
Deferred
income taxes
|
10
|
|
2,131,882
|
|
1,808,494
|
|
2,180,059
|
|
1,845,862
|
|
Deferred
income tax
|
10
|
|
-
|
|
-
|
|
120,589
|
|
85,310
|
Judicial
deposits
|
11
|
|
560,469
|
|
575,681
|
|
560,549
|
|
575,750
|
|
Liabilities
with related parties
|
30
|
|
1,165,241
|
|
960,056
|
|
-
|
|
-
|
Biological
assets
|
8
|
|
1,065,330
|
|
1,016,642
|
|
1,146,000
|
|
1,081,025
|
|
Employee
benefits
|
20
|
|
535,733
|
|
506,791
|
|
654,297
|
|
593,555
|
Receivables
from related parties
|
30
|
|
325
|
|
234
|
|
-
|
|
-
|
|
Derivative
financial instruments
|
24
|
|
43,905
|
|
3
|
|
43,905
|
|
3
|
Derivative
financial instruments
|
24
|
|
4,881
|
|
49,991
|
|
4,881
|
|
49,991
|
|
Other
non-current liabilities
|
|
|
284,277
|
|
482,109
|
|
305,581
|
|
1,093,942
|
Restricted
cash
|
|
|
24,178
|
|
-
|
|
24,178
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Other
non-current assets
|
|
|
65,881
|
|
78,516
|
|
70,990
|
|
85,537
|
|
|
|
|
|
|
|
|
|
|
|
Total
long-term receivables
|
|
|
9,271,205
|
|
9,046,922
|
|
9,812,056
|
|
9,455,356
|
|
Total
non-current liabilities
|
|
|
22,655,284
|
|
18,196,787
|
|
24,977,357
|
|
20,228,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
12,460,471
|
|
12,460,471
|
|
12,460,471
|
|
12,460,471
|
|
|
|
|
|
|
|
|
|
|
|
Capital
reserves
|
|
|
147,280
|
|
192,845
|
|
147,280
|
|
192,845
|
Investments
|
12
|
|
11,912,608
|
|
6,499,517
|
|
17,801
|
|
14,880
|
|
Accumulated
losses
|
|
|
(3,739,036)
|
|
(3,996,985)
|
|
(3,739,036)
|
|
(3,996,985)
|
Property,
plant and equipment, net
|
13
|
|
11,073,266
|
|
11,333,302
|
|
12,265,597
|
|
12,276,889
|
|
Treasury
shares
|
|
|
(138,098)
|
|
(38,239)
|
|
(138,098)
|
|
(38,239)
|
Intangible
assets
|
14
|
|
3,239,478
|
|
3,139,532
|
|
5,476,891
|
|
4,908,079
|
|
Other
comprehensive loss
|
|
|
(1,936,717)
|
|
(722,469)
|
|
(1,936,717)
|
|
(722,469)
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to controlling shareholders
|
|
|
6,793,900
|
|
7,895,623
|
|
6,793,900
|
|
7,895,623
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
-
|
|
-
|
|
251,565
|
|
252,726
|
Total
non-current assets
|
|
|
35,496,557
|
|
30,019,273
|
|
27,572,345
|
|
26,655,204
|
|
Total
equity
|
|
|
6,793,900
|
|
7,895,623
|
|
7,045,465
|
|
8,148,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
53,214,279
|
|
43,587,677
|
|
48,908,837
|
|
41,700,631
|
|
TOTAL
LIABILITIES AND EQUITY
|
|
|
53,214,279
|
|
43,587,677
|
|
48,908,837
|
|
41,700,631
|
The accompanying notes are an integral
part of the interim financial information.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
4
|
(in thousands of Brazilian Reais)
STATEMENT OF INCOME (LOSS)
|
|
|
Parent
company
|
|
Consolidated
|
|
Note
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
CONTINUING
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
SALES
|
26
|
|
7,063,409
|
|
14,512,454
|
|
7,025,848
|
|
13,443,794
|
|
9,103,926
|
|
18,052,991
|
|
8,338,009
|
|
15,697,259
|
Cost
of sales
|
29
|
|
(6,182,886)
|
|
(12,011,795)
|
|
(5,649,846)
|
|
(10,919,670)
|
|
(7,125,034)
|
|
(13,821,122)
|
|
(6,246,360)
|
|
(12,088,540)
|
GROSS
PROFIT
|
|
|
880,523
|
|
2,500,659
|
|
1,376,002
|
|
2,524,124
|
|
1,978,892
|
|
4,231,869
|
|
2,091,649
|
|
3,608,719
|
OPERATING
INCOME (EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
29
|
|
(1,057,781)
|
|
(2,090,348)
|
|
(987,445)
|
|
(1,887,936)
|
|
(1,360,889)
|
|
(2,645,223)
|
|
(1,256,777)
|
|
(2,392,072)
|
General
and administrative expenses
|
29
|
|
(122,609)
|
|
(209,890)
|
|
(85,753)
|
|
(177,433)
|
|
(190,465)
|
|
(333,025)
|
|
(136,157)
|
|
(277,386)
|
Impairment
loss on trade receivables
|
29
|
|
22,024
|
|
(9,078)
|
|
(1,035)
|
|
(7,573)
|
|
21,096
|
|
(11,755)
|
|
1,709
|
|
(3,798)
|
Other
operating income (expenses), net
|
27
|
|
147,221
|
|
(84,110)
|
|
263,008
|
|
175,516
|
|
138,553
|
|
(100,000)
|
|
230,477
|
|
153,801
|
Income
(loss) from associates and joint ventures
|
12
|
|
2,086,260
|
|
6,073,512
|
|
137,670
|
|
350,038
|
|
-
|
|
-
|
|
(860)
|
|
(1,025)
|
INCOME
BEFORE FINANCIAL RESULTS AND INCOME TAXES
|
|
|
1,955,638
|
|
6,180,745
|
|
702,447
|
|
976,736
|
|
587,187
|
|
1,141,866
|
|
930,041
|
|
1,088,239
|
Financial
expenses
|
28
|
|
(577,883)
|
|
(1,192,623)
|
|
(982,549)
|
|
(1,494,651)
|
|
(166,563)
|
|
(735,913)
|
|
(1,048,018)
|
|
(1,551,277)
|
Financial
income
|
28
|
|
66,332
|
|
173,109
|
|
460,656
|
|
540,550
|
|
81,833
|
|
194,711
|
|
474,668
|
|
560,729
|
Foreign exchange
and monetary variations
|
28
|
|
(1,037,987)
|
|
(4,851,516)
|
|
68,931
|
|
(75,350)
|
|
(105,573)
|
|
(255,570)
|
|
(45,972)
|
|
(77,039)
|
INCOME
(LOSS) BEFORE TAXES
|
|
|
406,100
|
|
309,715
|
|
249,485
|
|
(52,715)
|
|
396,884
|
|
345,094
|
|
310,719
|
|
20,652
|
Income
taxes
|
10
|
|
(102,230)
|
|
(51,766)
|
|
(61,591)
|
|
128,546
|
|
(89,755)
|
|
(76,197)
|
|
(119,696)
|
|
57,093
|
INCOME
FROM CONTINUING OPERATIONS
|
|
|
303,870
|
|
257,949
|
|
187,894
|
|
75,831
|
|
307,129
|
|
268,897
|
|
191,023
|
|
77,745
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) FROM DISCONTINUED OPERATIONS
|
|
|
-
|
|
-
|
|
134,931
|
|
(753,941)
|
|
-
|
|
-
|
|
133,931
|
|
(765,122)
|
INCOME
(LOSS) FOR THE PERIOD
|
|
|
303,870
|
|
257,949
|
|
322,825
|
|
(678,110)
|
|
307,129
|
|
268,897
|
|
324,954
|
|
(687,377)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income from Continuing Operation Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling
shareholders
|
|
|
303,870
|
|
257,949
|
|
187,894
|
|
75,831
|
|
303,870
|
|
257,949
|
|
187,894
|
|
75,831
|
Non-controlling
interest
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3,259
|
|
10,948
|
|
3,129
|
|
1,914
|
|
|
|
303,870
|
|
257,949
|
|
187,894
|
|
75,831
|
|
307,129
|
|
268,897
|
|
191,023
|
|
77,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss) From Discontinued Operation Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling
shareholders
|
|
|
-
|
|
-
|
|
134,931
|
|
(753,941)
|
|
-
|
|
-
|
|
134,931
|
|
(753,941)
|
Non-controlling
interest
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,000)
|
|
(11,181)
|
|
|
|
-
|
|
-
|
|
134,931
|
|
(753,941)
|
|
-
|
|
-
|
|
133,931
|
|
(765,122)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
PER SHARE FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding - basic
|
|
|
|
|
|
|
|
|
|
|
809,612,517
|
|
810,672,698
|
|
811,440,470
|
|
811,428,248
|
Income
per share - basic
|
23
|
|
|
|
|
|
|
|
|
|
0.38
|
|
0.32
|
|
0.23
|
|
0.09
|
Weighted
average shares outstanding - diluted
|
|
|
|
|
|
|
|
|
|
|
809,875,209
|
|
810,935,390
|
|
811,440,470
|
|
811,428,248
|
Income
per share - diluted
|
23
|
|
|
|
|
|
|
|
|
|
0.38
|
|
0.32
|
|
0.23
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSSES) PER SHARE FROM DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding - basic
|
|
|
|
|
|
|
|
|
|
|
809,612,517
|
|
810,672,698
|
|
811,440,470
|
|
811,428,248
|
Income
(losses) per share - basic
|
23
|
|
|
|
|
|
|
|
|
|
-
|
|
-
|
|
0.17
|
|
(0.93)
|
Weighted
average shares outstanding - diluted
|
|
|
|
|
|
|
|
|
|
|
809,612,517
|
|
810,672,698
|
|
811,440,470
|
|
811,428,248
|
Income
(losses) per share - diluted
|
23
|
|
|
|
|
|
|
|
|
|
-
|
|
-
|
|
0.17
|
|
(0.93)
|
The accompanying notes are an
integral part of the interim financial information.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
5
|
(in thousands of Brazilian Reais)
STATEMENT OF COMPREHENSIVE
INCOME (LOSS)
|
|
|
Parent
company
|
|
Consolidated
|
|
Note
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
Income
(loss) for the period
|
|
|
303,870
|
|
257,949
|
|
322,825
|
|
(678,110)
|
|
307,129
|
|
268,897
|
|
324,954
|
|
(687,377)
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
(loss) on foreign currency translation of foreign operations
|
|
|
(46,972)
|
|
(148,522)
|
|
(49,293)
|
|
659,167
|
|
(63,994)
|
|
(105,697)
|
|
(80,629)
|
|
617,836
|
Loss
on net investment hedge
|
|
|
(69,236)
|
|
(342,111)
|
|
-
|
|
-
|
|
(69,236)
|
|
(342,111)
|
|
-
|
|
-
|
Gain
(loss) on cash flow hedge
|
24
|
|
268,028
|
|
(741,483)
|
|
81,045
|
|
95,284
|
|
268,028
|
|
(741,483)
|
|
81,045
|
|
95,284
|
Gain
(loss) on debt investments measured at FVTOCI (1)
|
5
|
|
2,703
|
|
(170)
|
|
1,175
|
|
1,568
|
|
2,703
|
|
(170)
|
|
1,175
|
|
1,568
|
Net
other comprehensive income (loss), to be reclassified to the statement of income in subsequent periods
|
|
|
154,523
|
|
(1,232,286)
|
|
32,927
|
|
756,019
|
|
137,501
|
|
(1,189,461)
|
|
1,591
|
|
714,688
|
Gain
(loss) on equity investments measured at FVTOCI (1)
|
5
|
|
4,636
|
|
5,003
|
|
19,298
|
|
80,314
|
|
4,636
|
|
5,003
|
|
19,298
|
|
80,314
|
Actuarial
gains on pension and post-employment plans
|
20
|
|
6,647
|
|
13,035
|
|
4,393
|
|
5,311
|
|
6,623
|
|
12,964
|
|
4,373
|
|
4,956
|
Net
other comprehensive income, with no impact into subsequent statement of income
|
|
|
11,283
|
|
18,038
|
|
23,691
|
|
85,625
|
|
11,259
|
|
17,967
|
|
23,671
|
|
85,270
|
Total
comprehensive income (loss), net of taxes
|
|
|
469,676
|
|
(956,299)
|
|
379,443
|
|
163,534
|
|
455,889
|
|
(902,597)
|
|
350,216
|
|
112,581
|
Attributable
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling
shareholders
|
|
|
469,676
|
|
(956,299)
|
|
379,443
|
|
163,534
|
|
469,676
|
|
(956,299)
|
|
379,443
|
|
163,534
|
Non-controlling
interest
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(13,787)
|
|
53,702
|
|
(29,227)
|
|
(50,953)
|
|
|
|
469,676
|
|
(956,299)
|
|
379,443
|
|
163,534
|
|
455,889
|
|
(902,597)
|
|
350,216
|
|
112,581
|
|
(1)
|
FVTOCI: Fair Value Through Other Comprehensive Income.
|
Items above are stated net of tax and the
related taxes are disclosed in note 10.
The accompanying notes are an integral
part of the interim financial information.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
6
|
(in thousands of Brazilian Reais)
STATEMENT OF CHANGES IN
EQUITY
|
|
|
Attributed
to of controlling shareholders
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Paid-in
capital
|
|
Capital
reserve
|
|
Treasury
shares
|
|
Accumulated
foreign currency translation adjustments
|
|
Marketable
securities at FVTOCI
|
|
Gain
(losses) on cash flow hedge
|
|
Actuarial
losses
|
|
Retained
earnings (losses)
|
|
Total
equity
|
|
Non-controlling
interest
|
|
Total
shareholders' equity
(consolidated)
|
BALANCES
AT DECEMBER 31, 2018
|
|
|
12,460,471
|
|
115,354
|
|
(56,676)
|
|
(752,815)
|
|
(98,451)
|
|
(396,165)
|
|
(28,088)
|
|
(4,279,003)
|
|
6,964,627
|
|
567,150
|
|
7,531,777
|
Adoption
of IFRS 16
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,287
|
|
6,287
|
|
-
|
|
6,287
|
Comprehensive
income (loss) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
(loss) on foreign currency translation of foreign operations
|
|
|
-
|
|
-
|
|
-
|
|
626,254
|
|
-
|
|
-
|
|
-
|
|
-
|
|
626,254
|
|
(30,666)
|
|
595,588
|
Loss
on net investment hedge
|
|
|
-
|
|
-
|
|
-
|
|
(66,818)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(66,818)
|
|
-
|
|
(66,818)
|
Gains
on marketable securities measured at FVTOCI (2)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
102,905
|
|
-
|
|
-
|
|
-
|
|
102,905
|
|
-
|
|
102,905
|
Unrealized
gains in cash flow hedge
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
39,444
|
|
-
|
|
-
|
|
39,444
|
|
-
|
|
39,444
|
Actuarial
losses on pension and post-employment plans
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(148,735)
|
|
-
|
|
(148,735)
|
|
(1,786)
|
|
(150,521)
|
Income
(loss) for the year
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
297,612
|
|
297,612
|
|
(160)
|
|
297,452
|
SUB-TOTAL
COMPREHENSIVE INCOME (LOSS)
|
|
|
-
|
|
-
|
|
-
|
|
559,436
|
|
102,905
|
|
39,444
|
|
(148,735)
|
|
297,612
|
|
850,662
|
|
(32,612)
|
|
818,050
|
Realized
loss in marketable securities at FVTOCI (2)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(52,493)
|
|
(52,493)
|
|
-
|
|
(52,493)
|
Employee
benefits remeasurement - defined benefit
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
30,612
|
|
30,612
|
|
-
|
|
30,612
|
Appropriation
of income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(4,988)
|
|
(4,988)
|
Share-based
payments
|
|
|
-
|
|
(6,861)
|
|
18,437
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
11,576
|
|
-
|
|
11,576
|
Acquisition
(sale) of non-controlling interests
|
|
|
-
|
|
84,352
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
84,352
|
|
(276,824)
|
|
(192,472)
|
BALANCES
AT DECEMBER 31, 2019
|
|
|
12,460,471
|
|
192,845
|
|
(38,239)
|
|
(193,379)
|
|
4,454
|
|
(356,721)
|
|
(176,823)
|
|
(3,996,985)
|
|
7,895,623
|
|
252,726
|
|
8,148,349
|
Comprehensive
income (loss) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
(loss) on foreign currency translation of foreign operations
|
|
|
-
|
|
-
|
|
-
|
|
(148,522)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(148,522)
|
|
42,825
|
|
(105,697)
|
Loss
on net investment hedge
|
|
|
-
|
|
-
|
|
-
|
|
(342,111)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(342,111)
|
|
-
|
|
(342,111)
|
Gains
on marketable securities measured at FVTOCI (2)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4,833
|
|
-
|
|
-
|
|
-
|
|
4,833
|
|
-
|
|
4,833
|
Unrealized
losses in cash flow hedge
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(741,483)
|
|
-
|
|
-
|
|
(741,483)
|
|
-
|
|
(741,483)
|
Actuarial
gains (losses) on pension and post-employment plans
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
13,035
|
|
-
|
|
13,035
|
|
(71)
|
|
12,964
|
Income
for the period
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
257,949
|
|
257,949
|
|
10,948
|
|
268,897
|
SUB-TOTAL
COMPREHENSIVE INCOME (LOSS)
|
|
|
-
|
|
-
|
|
-
|
|
(490,633)
|
|
4,833
|
|
(741,483)
|
|
13,035
|
|
257,949
|
|
(956,299)
|
|
53,702
|
|
(902,597)
|
Share-based
payments
|
|
|
-
|
|
5,380
|
|
6,211
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
11,591
|
|
-
|
|
11,591
|
Acquisition
(sale) of non-controlling interests (3)
|
|
|
-
|
|
(50,945)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(50,945)
|
|
(54,863)
|
|
(105,808)
|
Acquisition
of treasury shares
|
|
|
-
|
|
-
|
|
(106,070)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(106,070)
|
|
-
|
|
(106,070)
|
BALANCES
AT JUNE 30, 2020
|
|
|
12,460,471
|
|
147,280
|
|
(138,098)
|
|
(684,012)
|
|
9,287
|
|
(1,098,204)
|
|
(163,788)
|
|
(3,739,036)
|
|
6,793,900
|
|
251,565
|
|
7,045,465
|
|
(1)
|
All changes in other comprehensive income are presented net of taxes.
|
|
(2)
|
FVTOCI: Fair Value Through Other Comprehensive Income.
|
|
(3)
|
Acquisition of remaining participation in the subsidiary Al Wafi (note
1.1).
|
The accompanying notes are an
integral part of the interim financial information.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
7
|
(in thousands of Brazilian Reais)
STATEMENT OF CASH FLOWS
|
|
Parent company
|
|
Consolidated
|
|
|
January to June 2020
|
|
January to June 2019
|
|
January to June 2020
|
|
January to June 2019
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
257,949
|
|
75,831
|
|
268,897
|
|
77,745
|
Adjustments for:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
610,390
|
|
635,429
|
|
741,053
|
|
745,932
|
Depreciation and depletion of biological assets
|
|
377,490
|
|
360,936
|
|
420,747
|
|
396,053
|
Result on disposals of property, plant and equipments
|
|
2,380
|
|
(24,223)
|
|
7,409
|
|
(18,248)
|
Write-down of inventories to net realizable value
|
|
40,021
|
|
83,670
|
|
63,180
|
|
89,553
|
Provision for tax, civil and labor risks
|
|
181,851
|
|
508,062
|
|
182,108
|
|
505,675
|
Income from associates and joint ventures
|
|
(6,073,512)
|
|
(350,038)
|
|
-
|
|
1,025
|
Financial results, net
|
|
5,871,030
|
|
1,029,451
|
|
796,772
|
|
1,067,587
|
Tax recoveries and gains in tax lawsuits
|
|
(224,820)
|
|
(687,371)
|
|
(224,820)
|
|
(687,371)
|
Deferred income tax
|
|
51,766
|
|
(128,546)
|
|
37,865
|
|
(143,931)
|
Employee profit sharing
|
|
121,399
|
|
101,684
|
|
117,992
|
|
110,455
|
Other (1)
|
|
251,911
|
|
82,466
|
|
259,024
|
|
56,644
|
|
|
1,467,855
|
|
1,687,351
|
|
2,670,227
|
|
2,201,119
|
Trade accounts receivable
|
|
(395,989)
|
|
(901,666)
|
|
643,436
|
|
348,735
|
Inventories
|
|
(701,669)
|
|
(78,771)
|
|
(1,223,384)
|
|
(218,889)
|
Biological assets - current
|
|
(258,755)
|
|
(30,054)
|
|
(268,631)
|
|
(49,177)
|
Trade accounts payable
|
|
286,358
|
|
(195,476)
|
|
522,587
|
|
(381,973)
|
Supply chain finance
|
|
140,750
|
|
(299,603)
|
|
140,750
|
|
(299,575)
|
Cash (applied) generated by operating activities
|
|
538,550
|
|
181,781
|
|
2,484,985
|
|
1,600,240
|
Investments in securities at FVTPL (2)
|
|
2,800
|
|
(89,046)
|
|
-
|
|
(92,911)
|
Redemptions of securities at FVTPL (2)
|
|
99,264
|
|
19,866
|
|
102,172
|
|
20,244
|
Interest received
|
|
50,925
|
|
94,254
|
|
57,176
|
|
108,632
|
Dividends and interest on shareholders' equity received
|
|
196
|
|
8,247
|
|
-
|
|
15,551
|
Payment of tax, civil and labor provisions
|
|
(129,746)
|
|
(173,762)
|
|
(129,748)
|
|
(173,762)
|
Payment of interest
|
|
(474,804)
|
|
(486,667)
|
|
(553,441)
|
|
(557,228)
|
Derivative financial instruments
|
|
1,137,007
|
|
(94,366)
|
|
1,141,152
|
|
(109,092)
|
Payment of income tax and social contribution
|
|
-
|
|
-
|
|
(146)
|
|
(68)
|
Other operating assets and liabilities
|
|
947,290
|
|
(628,334)
|
|
450,922
|
|
(97,323)
|
Net cash (applied) provided by operating activities
|
|
2,171,482
|
|
(1,168,027)
|
|
3,553,072
|
|
714,283
|
Net cash (applied) provided by operating activities from discontinued operations
|
|
-
|
|
48,342
|
|
-
|
|
(109,234)
|
Net cash (applied) provided by operating activities
|
|
2,171,482
|
|
(1,119,685)
|
|
3,553,072
|
|
605,049
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Investments in securities at amortized cost
|
|
-
|
|
-
|
|
-
|
|
(15,362)
|
Redemptions of securities at amortized cost
|
|
-
|
|
89,046
|
|
-
|
|
95,638
|
Redemptions of securities at FVTOCI (3)
|
|
-
|
|
100,547
|
|
-
|
|
131,997
|
Redemption (Investments) of restricted cash
|
|
285,622
|
|
9,834
|
|
285,622
|
|
30,522
|
Additions to property, plant and equipment
|
|
(274,851)
|
|
(162,159)
|
|
(285,323)
|
|
(178,085)
|
Additions to biological assets - non-current
|
|
(423,203)
|
|
(353,318)
|
|
(470,300)
|
|
(391,839)
|
Proceeds from disposals of property, plant, equipment and investments
|
|
65,717
|
|
379,256
|
|
65,717
|
|
1,789,751
|
Additions to intangible assets
|
|
(64,428)
|
|
(43,071)
|
|
(59,067)
|
|
(43,283)
|
Business combination, net of cash
|
|
-
|
|
-
|
|
-
|
|
(183,672)
|
Sale of participation in associated entities
|
|
-
|
|
-
|
|
38,546
|
|
-
|
Sale (acquisition) of participation in joint ventures and associated entities
|
|
(547)
|
|
1,971
|
|
(547)
|
|
1,971
|
Capital increase (decrease) in associates and joint ventures
|
|
(5,000)
|
|
-
|
|
-
|
|
-
|
Advance for future capital increase
|
|
-
|
|
(1,559)
|
|
-
|
|
-
|
Net cash provided (used in) investing activities
|
|
(416,690)
|
|
20,547
|
|
(425,352)
|
|
1,237,638
|
Net cash provided (used in) investing activities from discontinued operations
|
|
-
|
|
-
|
|
-
|
|
(58,782)
|
Net cash provided (used in) investing activities
|
|
(416,690)
|
|
20,547
|
|
(425,352)
|
|
1,178,856
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from debt issuance
|
|
2,855,552
|
|
1,668,093
|
|
3,357,785
|
|
1,783,550
|
Repayment of debt
|
|
(1,381,422)
|
|
(2,395,287)
|
|
(1,639,768)
|
|
(3,121,428)
|
Treasury shares acquisition
|
|
(106,070)
|
|
-
|
|
(106,070)
|
|
-
|
Acquisition of non-controlling interests
|
|
-
|
|
-
|
|
(100,390)
|
|
-
|
Payment of lease liabilities
|
|
(221,046)
|
|
(238,305)
|
|
(268,264)
|
|
(279,086)
|
Net cash provided (used in) by financing activities
|
|
1,147,014
|
|
(965,499)
|
|
1,243,293
|
|
(1,616,964)
|
Net cash provided (used in) by financing activities from discontinued operations
|
|
-
|
|
-
|
|
-
|
|
1,567
|
Net cash provided (used in) by financing activities
|
|
1,147,014
|
|
(965,499)
|
|
1,243,293
|
|
(1,615,397)
|
EFFECT OF EXCHANGE RATE VARIATION ON CASH AND CASH EQUIVALENTS
|
|
198,521
|
|
8,903
|
|
1,062,477
|
|
31,572
|
Net increase (decrease) in cash and cash equivalents
|
|
3,100,327
|
|
(2,055,734)
|
|
5,433,490
|
|
200,080
|
At the beginning of the period
|
|
1,368,980
|
|
3,826,698
|
|
4,237,785
|
|
5,036,011
|
At the end of the period
|
|
4,469,307
|
|
1,770,964
|
|
9,671,275
|
|
5,236,091
|
|
(1)
|
Includes provision for class action agreement (note 1.3).
|
|
(2)
|
FVTPL: Fair Value Through Profit and Loss.
|
|
(3)
|
FVTOCI: Fair Value Through Other Comprehensive Income.
|
The accompanying notes are an
integral part of the interim financial information.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
8
|
(in thousands of Brazilian Reais)
STATEMENT OF VALUE ADDED
|
|
Parent company
|
|
Consolidated
|
|
|
January to June 2020
|
|
Restated (1) January to June 2019
|
|
January to June 2020
|
|
Restated (1) January to June 2019
|
1 - REVENUES
|
|
16,501,955
|
|
15,401,404
|
|
19,998,832
|
|
17,849,033
|
Sales of goods and products
|
|
16,317,046
|
|
14,960,053
|
|
19,859,521
|
|
17,386,060
|
Other income
|
|
38,180
|
|
277,842
|
|
18,082
|
|
266,806
|
Revenue related to construction of own assets
|
|
272,645
|
|
155,251
|
|
264,438
|
|
159,210
|
Expected credit losses
|
|
(125,916)
|
|
8,258
|
|
(143,209)
|
|
36,957
|
2 - RAW MATERIAL ACQUIRED FROM THIRD PARTIES
|
|
(10,837,295)
|
|
(9,701,424)
|
|
(12,834,954)
|
|
(11,121,046)
|
Costs of goods sold
|
|
(9,226,376)
|
|
(8,278,794)
|
|
(10,887,673)
|
|
(9,344,518)
|
Materials, energy, third parties services and other
|
|
(1,620,836)
|
|
(1,443,640)
|
|
(1,945,822)
|
|
(1,804,238)
|
Reversal for inventories losses
|
|
9,917
|
|
21,010
|
|
(1,459)
|
|
27,710
|
3 - GROSS ADDED VALUE (1-2)
|
|
5,664,660
|
|
5,699,980
|
|
7,163,878
|
|
6,727,987
|
4 - DEPRECIATION AND AMORTIZATION
|
|
(987,880)
|
|
(996,365)
|
|
(1,161,800)
|
|
(1,141,985)
|
5 - NET ADDED VALUE (3-4)
|
|
4,676,780
|
|
4,703,615
|
|
6,002,078
|
|
5,586,002
|
|
|
|
|
|
|
|
|
|
6 - RECEIVED FROM THIRD PARTIES
|
|
6,245,730
|
|
889,945
|
|
194,653
|
|
559,612
|
Income from associates and joint ventures
|
|
6,073,512
|
|
350,038
|
|
-
|
|
(1,025)
|
Financial income
|
|
173,109
|
|
540,550
|
|
194,711
|
|
560,729
|
Others
|
|
(891)
|
|
(643)
|
|
(58)
|
|
(92)
|
|
|
|
|
|
|
|
|
|
7 - ADDED VALUE TO BE DISTRIBUTED (5+6)
|
|
10,922,510
|
|
5,593,560
|
|
6,196,731
|
|
6,145,614
|
|
|
|
|
|
|
|
|
|
8 - DISTRIBUTION OF ADDED VALUE
|
|
10,922,510
|
|
5,593,560
|
|
6,196,731
|
|
6,145,614
|
Payroll
|
|
2,504,040
|
|
2,294,875
|
|
2,743,528
|
|
2,503,839
|
Salaries
|
|
1,829,075
|
|
1,718,794
|
|
2,021,894
|
|
1,890,010
|
Benefits
|
|
544,184
|
|
461,296
|
|
582,713
|
|
492,363
|
Government severance indemnity fund for employees
|
|
130,781
|
|
114,785
|
|
138,921
|
|
121,466
|
Taxes, Fees and Contributions
|
|
2,045,361
|
|
1,582,357
|
|
2,085,446
|
|
1,837,334
|
Federal
|
|
850,068
|
|
603,475
|
|
886,296
|
|
856,227
|
State
|
|
1,174,975
|
|
959,009
|
|
1,174,972
|
|
959,115
|
Municipal
|
|
20,318
|
|
19,873
|
|
24,178
|
|
21,992
|
Capital Remuneration from Third Parties
|
|
6,115,160
|
|
1,640,497
|
|
1,098,860
|
|
1,726,696
|
Interests, including exchange variation
|
|
6,052,527
|
|
1,580,544
|
|
999,871
|
|
1,638,859
|
Rents
|
|
62,633
|
|
59,953
|
|
98,989
|
|
87,837
|
Interest on Own-Capital
|
|
257,949
|
|
75,831
|
|
268,897
|
|
77,745
|
Income of the period
|
|
257,949
|
|
75,831
|
|
257,949
|
|
75,831
|
Non-controlling interest
|
|
-
|
|
-
|
|
10,948
|
|
1,914
|
|
(1)
|
The comparative period was restated for better disclosure of exchange
variations.
|
The accompanying notes are an
integral part of the interim financial information.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
9
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
10
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
11
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
12
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
13
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
14
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
15
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
16
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
17
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
18
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
19
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
20
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
21
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
22
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
23
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
24
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
25
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
26
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
27
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
28
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
29
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
30
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
31
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
32
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
33
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
34
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
35
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
36
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
37
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
38
|
BRF S.A. (“BRF”)
and its subsidiaries (collectively the “Company”) is a publicly traded company, listed on the segment Novo
Mercado of Brasil, Bolsa, Balcão (“B3”), under the ticker BRFS3, and listed on the New York Stock Exchange (“NYSE”),
under the ticker BRFS. The Company’s registered office is at Rua Jorge Tzachel, nº
475, Bairro Fazenda, Itajaí - Santa Catarina and the main business office is in the city of São Paulo.
BRF is a Brazilian multinational
company, with global presence, which owns a comprehensive portfolio of products, and it is one of the world’s largest companies
of food products. The Company operates by raising, producing and slaughtering poultry and pork for processing, production and sale
of fresh meat, processed products, pasta, margarine and others.
The Company holds as main brands
Sadia, Perdigão, Qualy, Chester®, Kidelli, Perdix and Banvit, present mainly in Brazil, Turkey and Middle Eastern countries.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
39
|
|
|
|
|
|
|
|
%
equity interest
|
Entity
|
|
|
Main
activity
|
|
Country
|
|
06.30.20
|
|
12.31.19
|
|
|
|
|
|
|
|
|
|
|
BRF
Energia S.A.
|
|
|
Commercialization
of eletric energy
|
|
Brazil
|
|
100.00
|
|
100.00
|
BRF
GmbH
|
|
|
Holding
|
|
Austria
|
|
100.00
|
|
100.00
|
BRF
Foods LLC
|
|
|
Import,
industrialization and commercialization of products
|
|
Russia
|
|
99.90
|
|
99.90
|
BRF
Global Company Nigeria Ltd.
|
(a)
|
|
Marketing
and logistics services
|
|
Nigeria
|
|
99.00
|
|
99.00
|
BRF
Global Company South Africa Proprietary Ltd.
|
|
|
Administrative,
marketing and logistics services
|
|
South
Africa
|
|
100.00
|
|
100.00
|
BRF
Global Company Nigeria Ltd.
|
(a)
|
|
Marketing
and logistics services
|
|
Nigeria
|
|
1.00
|
|
1.00
|
BRF
Global GmbH
|
|
|
Holding
and trading
|
|
Austria
|
|
100.00
|
|
100.00
|
BRF
Foods LLC
|
|
|
Import,
industrialization and commercialization of products
|
|
Russia
|
|
0.10
|
|
0.10
|
BRF
Japan KK
|
|
|
Marketing
and logistics services, import, export, industrialization and commercialization of products
|
|
Japan
|
|
100.00
|
|
100.00
|
BRF
Korea LLC
|
|
|
Marketing
and logistics services
|
|
Korea
|
|
100.00
|
|
100.00
|
BRF
Shanghai Management Consulting Co. Ltd.
|
|
|
Provision
of consultancy and marketing services
|
|
China
|
|
100.00
|
|
100.00
|
BRF
Shanghai Trading Co. Ltd.
|
|
|
Import,
export and commercialization of products
|
|
China
|
|
100.00
|
|
100.00
|
BRF
Singapore Foods PTE Ltd.
|
|
|
Administrative,
marketing and logistics services
|
|
Singapore
|
|
100.00
|
|
100.00
|
BRF
Hungary LLC
|
(c)
|
|
Import
and commercialization of products
|
|
Hungary
|
|
-
|
|
100.00
|
Compañía
Paraguaya Comercial S.A.
|
(a)
|
|
Import
and commercialization of products
|
|
Paraguay
|
|
99.00
|
|
99.00
|
Eclipse
Holding Cöoperatief U.A.
|
|
|
Holding
|
|
The
Netherlands
|
|
99.99
|
|
99.99
|
Buenos
Aires Fortune S.A.
|
|
|
Holding
|
|
Argentina
|
|
5.00
|
|
5.00
|
Eclipse
Latam Holdings
|
|
|
Holding
|
|
Spain
|
|
100.00
|
|
100.00
|
Buenos
Aires Fortune S.A.
|
|
|
Holding
|
|
Argentina
|
|
95.00
|
|
95.00
|
Perdigão
Europe Lda.
|
|
|
Import,
export of products and administrative services
|
|
Portugal
|
|
100.00
|
|
100.00
|
Perdigão
International Ltd.
|
|
|
Import
and export of products
|
|
Cayman
Island
|
|
100.00
|
|
100.00
|
BFF
International Ltd.
|
|
|
Financial
fundraising
|
|
Cayman
Island
|
|
100.00
|
|
100.00
|
Highline
International
|
|
|
Financial
fundraising
|
|
Cayman
Island
|
|
100.00
|
|
100.00
|
Sadia
Overseas Ltd.
|
(a)
|
|
Financial
fundraising
|
|
Cayman
Island
|
|
100.00
|
|
100.00
|
ProudFood
Lda
|
|
|
Import
and commercialization of products
|
|
Angola
|
|
90.00
|
|
90.00
|
Sadia
Chile S.A.
|
|
|
Import,
export and commercialization of products
|
|
Chile
|
|
40.00
|
|
40.00
|
BRF
Global Namíbia
|
(a)
|
|
Import
and commercialization of products
|
|
Namibia
|
|
100.00
|
|
100.00
|
Wellax
Food Logistics C.P.A.S.U. Lda.
|
|
|
Import,
commercialization of products and administrative services
|
|
Portugal
|
|
100.00
|
|
100.00
|
BRF
Austria GmbH
|
|
|
Holding
|
|
Austria
|
|
100.00
|
|
100.00
|
One
Foods Holdings Ltd
|
|
|
Holding
|
|
United
Arab Emirates
|
|
100.00
|
|
100.00
|
Al-Wafi
Food Products Factory LLC
|
|
|
Import,
export, industrialization and commercialization of products
|
|
United
Arab Emirates
|
|
49.00
|
|
49.00
|
Badi
Ltd.
|
|
|
Holding
|
|
United
Arab Emirates
|
|
100.00
|
|
100.00
|
Al-Wafi
Al-Takamol International for Foods Products
|
(b)
|
|
Import
and commercialization of products
|
|
Saudi
Arabia
|
|
100.00
|
|
75.00
|
BRF
Al Yasra Food K.S.C.C. ("BRF AFC")
|
|
|
Import,
commercialization and distribution of products
|
|
Kuwait
|
|
49.00
|
|
49.00
|
BRF
Foods GmbH
|
|
|
Industrialization,
import and commercialization of products
|
|
Austria
|
|
100.00
|
|
100.00
|
Al
Khan Foodstuff LLC ("AKF")
|
|
|
Import,
commercialization and distribution of products
|
|
Oman
|
|
70.00
|
|
70.00
|
FFM
Further Processing Sdn. Bhd.
|
(d)
|
|
Industrialization,
import and commercialization of products
|
|
Malaysia
|
|
-
|
|
70.00
|
FFQ
GmbH
|
|
|
Industrialization,
import and commercialization of products
|
|
Austria
|
|
100.00
|
|
100.00
|
TBQ
Foods GmbH
|
|
|
Holding
|
|
Austria
|
|
60.00
|
|
60.00
|
Banvit
Bandirma Vitaminli
|
|
|
Import,
industrialization and commercialization of products
|
|
Turkey
|
|
91.71
|
|
91.71
|
Banvit
Enerji ve Elektrik Üretim Ltd. Sti.
|
(a)
|
|
Generation
and commercialization of electric energy
|
|
Turkey
|
|
100.00
|
|
100.00
|
Banvit
Foods SRL
|
|
|
Industrialization
of grains and animal feed
|
|
Romania
|
|
0.01
|
|
0.01
|
Nutrinvestments
BV
|
|
|
Holding
|
|
The
Netherlands
|
|
100.00
|
|
100.00
|
Banvit
ME FZE
|
|
|
Marketing
and logistics services
|
|
United
Arab Emirates
|
|
100.00
|
|
100.00
|
Banvit
Foods SRL
|
|
|
Industrialization
of grains and animal feed
|
|
Romania
|
|
99.99
|
|
99.99
|
One
Foods Malaysia SDN. BHD.
|
|
|
Marketing
and logistics services
|
|
Malaysia
|
|
100.00
|
|
100.00
|
Federal
Foods LLC
|
|
|
Import,
commercialization and distribution of products
|
|
United
Arab Emirates
|
|
49.00
|
|
49.00
|
Federal
Foods Qatar
|
|
|
Import,
commercialization and distribution of products
|
|
Qatar
|
|
49.00
|
|
49.00
|
BRF
Hong Kong LLC
|
(a)
|
|
Import,
commercialization and distribution of products
|
|
Hong
Kong
|
|
100.00
|
|
100.00
|
Eclipse
Holding Cöoperatief U.A.
|
|
|
Holding
|
|
The
Netherlands
|
|
0.01
|
|
0.01
|
Establecimiento
Levino Zaccardi y Cia. S.A.
|
(a)
|
|
Industrialization
and commercialization of dairy products
|
|
Argentina
|
|
99.94
|
|
99.94
|
BRF
Pet S.A.
|
|
|
Industrialization,
commercialization and distribution of feed and nutrients for animals
|
|
Brazil
|
|
100.00
|
|
100.00
|
PP-BIO
Administração de bem próprio S.A.
|
|
|
Management
of assets
|
|
Brazil
|
|
33.33
|
|
33.33
|
PR-SAD
Administração de bem próprio S.A.
|
|
|
Management
of assets
|
|
Brazil
|
|
33.33
|
|
33.33
|
ProudFood
Lda
|
|
|
Import
and commercialization of products
|
|
Angola
|
|
10.00
|
|
10.00
|
PSA
Laboratório Veterinário Ltda.
|
|
|
Veterinary
activities
|
|
Brazil
|
|
99.99
|
|
99.99
|
Sino
dos Alpes Alimentos Ltda.
|
(a)
|
|
Industrialization
and commercialization of products
|
|
Brazil
|
|
99.99
|
|
99.99
|
Sadia
Alimentos S.A.
|
|
|
Holding
|
|
Argentina
|
|
43.10
|
|
43.10
|
Sadia
International Ltd.
|
|
|
Import
and commercialization of products
|
|
Cayman
Island
|
|
100.00
|
|
100.00
|
Sadia
Chile S.A.
|
|
|
Import,
export and marketing of products
|
|
Chile
|
|
60.00
|
|
60.00
|
Sadia
Uruguay S.A.
|
|
|
Import
and commercialization of products
|
|
Uruguay
|
|
5.10
|
|
5.10
|
Compañía
Paraguaya Comercial S.A.
|
(a)
|
|
Import
and commercialization of products
|
|
Paraguay
|
|
1.00
|
|
1.00
|
Sadia
Alimentos S.A.
|
|
|
Holding
|
|
Argentina
|
|
56.90
|
|
56.90
|
Sadia
Uruguay S.A.
|
|
|
Import
and commercialization of products
|
|
Uruguay
|
|
94.90
|
|
94.90
|
Vip
S.A. Empreendimentos e Participações Imobiliárias
|
|
|
Commercialization
of owned real state
|
|
Brazil
|
|
100.00
|
|
100.00
|
Establecimiento
Levino Zaccardi y Cia. S.A.
|
(a)
|
|
Industrialization
and commercialization of dairy products
|
|
Argentina
|
|
0.06
|
|
0.06
|
PSA
Laboratório Veterinário Ltda.
|
|
|
Veterinary
activities
|
|
Brazil
|
|
0.01
|
|
0.01
|
Sino
dos Alpes Alimentos Ltda.
|
(a)
|
|
Industrialization
and commercialization of products
|
|
Brazil
|
|
0.01
|
|
0.01
|
|
(a)
|
Dormant subsidiaries. The Company is evaluating the liquidation of
these subsidiaries.
|
On July 8, 2020, Sadia Overseas
Ltd. was liquidated.
|
(b)
|
On April 21, 2020, Badi Ltd. acquired the non-controlling portion
of Al-Wafi Al-Takamol International for Foods Products by the amount equivalent to R$100,390 (USD 19,000).
|
|
(c)
|
On June 10, 2020, BRF Hungary LLC was dissolved.
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
40
|
|
(d)
|
On June 24, 2020, BRF Foods GmbH sold all shares held of FFM Further
Processing Sdn. Bhd to FFM Berhad for the amount equivalent to R$38,546 (USD7,350). The amount paid is presented in the Investing
Activities on the Statement of Cash Flows.
|
On August 20, 2019, the Company’s
wholly-owned subsidiary Badi Limited executed a Share Purchase Agreement with Al Takamul International Company for Commercial Investment
Limited for the purchase of the remaining 25% of the capital stock owned by non-controlling shareholders in Al Wafi Al Takamul
International Company for Food Products Limited (“Wafi”), a company incorporated in the Kingdom of Saudi Arabia responsible
for distributing BRF products in that country. The transaction closed on April 21, 2020 for an amount equivalent to R$100,390 thousand
(USD19,000 thousand), at which point Wafi became a wholly-owned subsidiary of Badi Limited. The amount paid is presented in the
Financing Activities on the Statement of Cash Flows and the difference between the amount paid and the book value of the participation
in the subsidiary was recorded in Capital Reserves, in the amount of R$50,945.
On May 07, 2020, the Company
executed a share purchase agreement with Hungry Bunny Limited and others, establishing the terms and conditions for the acquisition
of 100% of the capital stock of Joody Al Sharqiya Food Production Factory, a food processing company in Saudi Arabia. The transaction
considered an enterprise value equivalent to R$43,808 (USD8,000). The closing of this transaction is subject to the satisfaction
of conditions precedent applicable to transactions of this nature, including the approval by regulatory authorities.
Except for the associates PP-BIO
and PR-SAD in which the Company records the investments by the equity method, all other entities shown in the table above were
consolidated.
|
1.2.
|
Investigations involving BRF
|
The Company has been subject
to two external investigations, denominated “Carne Fraca Operation” in 2017 and “Trapaça Operation”
in 2018, as detailed below. The Company’s Audit and Integrity Committee conducted independent investigations, along with
the Independent Investigation Committee, composed of external members and with external legal advisors in Brazil and abroad with
respect to the allegations involving BRF employees and former employees in the scope of the aforementioned operations and other
ongoing investigations.
For the six-month period ended
on June 30, 2020, the main impacts observed as result of the referred investigations were recorded in other operating expenses
in the amount of R$24,072 (R$42,320 in the same period of the previous year), and for three-month period ended on June 30, 2020
the referred impacts amounted R$11,771 (R$31,207 in the same period of the previous year) mostly related to expenditures with lawyers,
legal advisors and consultants.
In addition to the impacts already
registered, there are uncertainties about the outcome of these operations which may result in penalties, fines and normative sanctions,
right restrictions and other forms of liabilities, for which the Company is not able to make a reliable estimate of the potential
losses.
The outcomes may result in payments
of substantial amounts, which may cause a material adverse effect on the Company’s financial position, results and cash flows
in the future.
|
1.2.1.
|
Carne Fraca Operation
|
On March 17, 2017, BRF became
aware of a decision issued by a judge of the 14th Federal Court of Curitiba - Paraná, authorizing the search and seizure
of information and documents, and the detention of certain individuals in the context of the Carne Fraca Operation. Two
BRF employees were detained and subsequently released, as well as three others were identified for questioning.
In April 2017, the Brazilian
Federal Police and the Brazilian federal prosecutors filed charges against BRF employees, which were accepted by the judge responsible
for the process, and its main allegations in this phase involved misconduct related to improper offers and/or promises to government
inspectors.
On June 04, 2018, the Company
was informed about the establishment of a responsibility administrative process (“PAR”) by the Office of the Comptroller
General (“CGU”), under the Law Nº 12,846/2013
(“Anti-corruption Law”), which aims to verify eventual administrative responsibilities related to the facts object
of the criminal lawsuit Nº 5016879-04.2017.4.04.7000, (“Criminal
Lawsuit”) in progress under the 14th Federal Court of the subsection of Curitiba/PR, as a consequence of the Carne Fraca
Operation.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
41
|
BRF has informed certain regulators
and governmental entities, including the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of
Justice (“DOJ”) about the Carne Fraca Operation and is cooperating with such authorities, which are conducting
their own investigations.
On September 28, 2018, the sentence
of the Criminal Lawsuit in first instance was published, discharging one of the BRF employees and convicting a former employee
for six months of detention with the possibility of substitution for a right-restricting penalty. The Brazilian federal prosecutors
presented appeal to the first instance decision. Since then, the appeal is being analyzed by the Federal Regional Court of the
4th region.
On March 5, 2018, the Company
learned of a decision issued by a judge of the 1st Federal Court of Ponta Grossa/PR, authorizing the search and seizure of information
and documents due to allegations involving misconduct relating to quality violations, improper use of feed components and falsification
of tests at certain BRF manufacturing plants and accredited labs. Such operation was denominated as Trapaça Operation.
On March 5, 2018, BRF received notice from the Ministry of Agriculture, Livestock and Food Supply (“MAPA”) immediately
suspending exports from its Rio Verde/GO, Carambeí/PR and Mineiros/GO plants to 12 countries that require specific sanitary
requirements for the control of the bacteria group Salmonella spp and Salmonella pullorum.
On May 14, 2018, the Company
received the formal notice that twelve plants located in Brazil were removed from the list that permits imports of animal origin
products by the European Union’s countries. The measure came into force as of May 16, 2018 and affects only the plants located
in Brazil and which have export licenses to the European Union, not affecting the supply to other markets or other BRF plants located
outside Brazil and that export to the European market.
On October 15, 2018, the Federal
Police Department submitted to the 1st Federal Criminal Court of the Judicial Branch of Ponta Grossa –
PR the final report of its investigation in connection to the Trapaça Operation. The police inquiry indicted 43 people,
including former key executives of the Company.
On December 04, 2019, the Public
Prosecution filed charges against eleven people related to allegations about Premix (compound of vitamins, minerals, and amino
acids for the inclusion of micro ingredients in the feed for the ideal nutrition of the animals) as outcome of the Trapaça
Operation. No administration member, director or executive in current management position has been identified.
BRF informed certain regulators and
government entities, including SEC and DOJ about the Trapaça Operation and has been cooperating with such authorities,
which are conducting their own investigations.
|
1.2.3.
|
Governance enhancement
|
The Company is cooperating with
the investigations and collaborates to the clarification of the facts. The Company has been taking actions to strengthen the compliance
with its policies, procedures and internal controls. In this sense, the Company has decided to move away, independently of the
results of the investigations, all employees mentioned in the Federal Police’s final report of the Trapaça
Operation until all facts are clarified.
The Company believes that its
efforts strengthens and consolidates its governance to ensure the highest levels of safety standards, integrity and quality.
Among the actions implemented, are:
(i) strengthening in the risk management, specially compliance, (ii) continuous strengthening of the Compliance, Internal Audit
and Internal Controls departments, (iii) review and issuance of new policies and procedures specifically related to applicable
anticorruption laws, (iv) review and enhancement of the procedures for reputational verification of business partners, (v) review
and enhancement of the processes of internal investigation, (vi) expansion of the independent reporting channel, (vii) review of
transactional controls, and (viii) review and issuance of new consequence policy for misconduct.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
42
|
On March 12, 2018, a shareholder class
action lawsuit was filed against the Company, some of its former managers and one current officer before the United States Federal
District Court in the city of New York, on behalf of holders of American Depositary Receipts (“ADR”) between April
4, 2013 and March 5, 2018. The suit alleged violations of the federal securities laws of the United States related to allegations
concerning, among other matters, Carne Fraca Operation and Trapaça Operation. On July 2, 2018, that Court
appointed the City of Birmingham Retirement and Relief System lead plaintiff in the action. On October 25, 2019, the Court granted
lead plaintiff leave to file a Fourth Amended Complaint, which was filed on November 8, 2019. On December 13, 2019, the served
defendants filed a motion to dismiss. On January 21, 2020, the Lead Plaintiff filed its opposition motion and, on February 11,
2020, the defendants filed a response.
On
March 27, 2020, the parties reached an agreement to settle this class action by payment of an amount equivalent to R$204,436 (USD40,000),
to resolve all pending and prospective claims by individuals or entities who purchased or otherwise acquired BRF’s
ADRs between April 4, 2013 and March 5, 2018. On May 27, 2020, the amount was transferred to an escrow account in the name of the
lawyers of the Lead Plaintiff. The settlement is subject to court ratification and execution of final settlement documentation.
The agreement does not constitute
any admission of liability or wrongdoing by BRF or its executives and expressly provides that BRF denies any misconduct or that
any plaintiff has suffered any damages or was harmed by any conduct alleged in this action.
The provision for the aforementioned
amount was recognized in other operating expenses (note 27) in the first quarter of 2020.
|
1.4.
|
Coronavirus (COVID-19)
|
On January 31, 2020 the World
Health Organization announced that the COVID-19 is a global health emergency and on March 11, 2020 declared it a global pandemic.
The outbreak has triggered significant decisions from governments and private sector entities, which in addition to the potential
impact, increased the uncertainty level for the economic agents and may cause effects in the amounts recognized in the financial
statements.
BRF continues to operate its
industrial complexes, distribution centers, logistics, supply chain and administrative offices, even if temporarily and partially
under remote work regime in some of the corporate offices. Therefore, until the date of approval of the interim financial information,
there has been no relevant change in its production plan, operation and/or commercialization. Additionally, management has developed
and implemented contingency plans to maintain the operations and monitors the effects of the pandemic through a permanent multidisciplinary
monitoring committee, formed by executives, specialists in the public health area and consultants.
Due to the pandemic, the Company
has incurred in losses and additional expenditures, mainly related to idleness, personnel, prevention, control and donations, as
shown below:
|
|
|
|
Consolidated
|
|
|
April to June 2020
|
|
January to June 2020
|
|
|
|
|
|
Cost of sales
|
|
(173,674)
|
|
(174,288)
|
Selling expenses
|
|
(18,575)
|
|
(46,317)
|
General and administrative expenses
|
|
(25,893)
|
|
(26,066)
|
|
|
(218,142)
|
|
(246,671)
|
Aiming
to preventively strengthen its liquidity level, the Company contracted credit facilities with financial institutions in Brazil
in the aggregate amount of, approximately, R$2,430,000 and average term of one year, without any financial covenant clause. During
July and August of 2020, the Company prepaid part of the referred credit facilities in the aggregated notional and interest amount
of R$964,484 (note 33.3).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
43
|
The management also understands that
the projections of results and cashflows used for the impairment test of the cash generating units are still substantially adequate
and there are no indications of possible impairment. Due to the high volatility and uncertainty around the length and the impact
of the pandemic, the Company will keep monitoring the situation and evaluating the impacts on assumptions and estimates used in
preparing our financial reporting.
During the months of November
and December of each year, the Company is impacted by seasonality in the Brazil operating segment due to Christmas and New Year’s
Celebrations. The products that are relevant contributors are: turkey, Chester®, ham and pork cuts (hind leg/pork loin).
In the International operating
segment, seasonality is due to Ramadan, which is the holy month of the Muslim calendar. The beginning of Ramadan depends on the
beginning of the moon cycle and in 2020 occurred between April 24, 2020 and May 23, 2020.
Consequently to the pandemic, the
behavior of the Company’s seasonality has circumstantially changed, due to the decreased movement of people, redirection
of channels and changes in the consumption habits.
|
2.
|
BASIS OF PREPARATION AND PRESENTATION OF INTERIM FINANCIAL STATEMENTS
|
The parent company’s and
consolidated interim financial information were prepared in accordance with the CPC 21 (R1) – Interim Financial Statements
and the IAS 34 – Interim Financial Reporting issued by the International Accounting Standards Board - IASB as well as with
the standards issued by the Brazilian Securities and Exchange Commission (“CVM”). All the relevant information applicable
to the interim financial information, and only them, are being evidenced and correspond to those used by administration in its
management.
The parent company’s and
consolidated interim financial information are expressed in thousands of Brazilian Reais (“R$”) and the disclosures
of amounts in other currencies, when applicable, were also expressed in thousands, unless otherwise stated.
The preparation of the parent
company’s and consolidated interim financial information require Management to make judgments, use estimates and adopt assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, as well as the disclosures of contingent liabilities.
The uncertainty inherent to these judgments, assumptions and estimates could result in material adjustments to the carrying amount
of certain assets and liabilities in future periods.
Any judgments, estimates and
assumptions are reviewed at each reporting period.
The parent company’s and
consolidated interim financial information were prepared based on the recoverable historical cost, except for the following material
items recognized in the statements of financial position:
(i) derivative
financial instruments and non-derivative financial instruments measured at fair value;
(ii) share-based
payments and employee benefits measured at fair value;
(iii) biological
assets measured at fair value; and
(iv) assets
held for sale in the cases the fair value is lower than historical cost.
The Company prepared parent company’s
and consolidated financial statements under the going concern assumption and disclosed all relevant information in its explanatory
notes, in order to clarify and complement the accounting basis adopted.
|
3.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
The interim financial information,
in this case quarterly financial information, aim to provide updated information based on the last annual financial statements
disclosed. Therefore, the quarterly financial information focus on new activities, events and circumstances and do not duplicate
the information previously disclosed, except when Management judges that the maintenance of the information is relevant.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
44
|
The interim financial information
was prepared based on the accounting policies and estimates calculation methodologies adopted in the preparation of the annual
financial statements for the year ended December 31, 2019 (note 3).
There were no changes on such policies
and estimates calculation methodologies. As allowed by CPC 21 (R1), Management decided not to disclose again the details of the
accounting policies adopted by the Company. Hence, the interim financial information should be read along with the annual financial
statements for the year ended December 31, 2019, in order to allow the users to further understand the Company’s financial
conditions and liquidity, as well as its capacity to generate profits and cash flows.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
45
|
|
4.
|
CASH AND CASH EQUIVALENTS
|
|
Average rate (p.a.)
|
|
Parent company
|
|
Consolidated
|
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Cash and bank accounts
|
|
|
|
|
|
|
|
|
|
U.S. Dollar
|
-
|
|
557
|
|
403
|
|
1,986,273
|
|
1,356,128
|
Brazilian Reais
|
-
|
|
55,070
|
|
166,506
|
|
55,886
|
|
167,051
|
Euro
|
-
|
|
16,065
|
|
3,813
|
|
61,634
|
|
71,626
|
Other currencies
|
-
|
|
219
|
|
180
|
|
1,254,978
|
|
694,982
|
|
|
|
71,911
|
|
170,902
|
|
3,358,771
|
|
2,289,787
|
Cash equivalents
|
|
|
|
|
|
|
|
|
|
In Brazilian Reais
|
|
|
|
|
|
|
|
|
|
Investment funds
|
0.27%
|
|
3,924
|
|
3,507
|
|
3,924
|
|
3,507
|
Bank deposit certificates
|
2.97%
|
|
4,090,514
|
|
869,473
|
|
4,104,358
|
|
879,758
|
|
|
|
4,094,438
|
|
872,980
|
|
4,108,282
|
|
883,265
|
In U.S. Dollar
|
|
|
|
|
|
|
|
|
|
Term deposit
|
0.90%
|
|
-
|
|
254,583
|
|
45,332
|
|
270,714
|
Overnight
|
0.07%
|
|
302,958
|
|
70,515
|
|
2,132,116
|
|
689,874
|
Other currencies
|
|
|
|
|
|
|
|
|
|
Term deposit
|
-
|
|
-
|
|
-
|
|
26,774
|
|
104,145
|
|
|
|
302,958
|
|
325,098
|
|
2,204,222
|
|
1,064,733
|
|
|
|
4,469,307
|
|
1,368,980
|
|
9,671,275
|
|
4,237,785
|
|
|
|
|
|
Average
interest rate (p.a.)
|
|
Parent
company
|
|
Consolidated
|
|
WAM
(1)
|
|
Currency
|
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Fair
value through other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
linked note
|
2.90
|
|
USD
|
|
3.85%
|
|
-
|
|
-
|
|
25,899
|
|
19,285
|
Stocks
|
-
|
|
R$
and HKD
|
|
-
|
|
-
|
|
-
|
|
42,307
|
|
26,678
|
|
|
|
|
|
|
|
-
|
|
-
|
|
68,206
|
|
45,963
|
Fair
value through profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
treasury bills
|
3.89
|
|
R$
|
|
2.15%
|
|
309,460
|
|
396,994
|
|
309,460
|
|
396,994
|
Investment
funds - FIDC BRF
|
3.46
|
|
R$
|
|
-
|
|
14,728
|
|
14,891
|
|
14,728
|
|
14,891
|
Investment
funds
|
0.09
|
|
ARS
|
|
-
|
|
-
|
|
-
|
|
1,824
|
|
1,903
|
|
|
|
|
|
|
|
324,188
|
|
411,885
|
|
326,012
|
|
413,788
|
Amortized
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sovereign
bonds and others (2)
|
2.83
|
|
AOA
|
|
3.82%
|
|
-
|
|
-
|
|
358,421
|
|
265,783
|
|
|
|
|
|
|
|
324,188
|
|
411,885
|
|
752,639
|
|
725,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
309,460
|
|
396,994
|
|
337,183
|
|
418,182
|
Non-current
(3)
|
|
|
|
|
|
|
14,728
|
|
14,891
|
|
415,456
|
|
307,352
|
|
(1)
|
Weighted average maturity in years.
|
|
(2)
|
It’s comprised of private securities and sovereign securities
of the Angola Government and are presented net of expected losses in the amount of R$2,062 (R$1,983 on December 31, 2019).
|
(3) Maturity
until December of 2023.
Additionally, as of June 30,
2020, the amount of R$88,098 (R$100,435 on December 31, 2019) was pledged as guarantee, with no use restrictions, for USD denominated
future contracts, traded on B3.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
46
|
|
6.
|
TRADE ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Trade accounts receivable
|
|
|
|
|
|
|
|
Domestic customers
|
660,003
|
|
1,333,344
|
|
676,209
|
|
1,336,762
|
Domestic related parties
|
2,091
|
|
800
|
|
-
|
|
-
|
Foreign customers
|
562,011
|
|
457,413
|
|
2,773,937
|
|
2,215,050
|
Foreign related parties
|
5,896,260
|
|
4,779,202
|
|
-
|
|
-
|
|
7,120,365
|
|
6,570,759
|
|
3,450,146
|
|
3,551,812
|
( - ) Adjustment to present value
|
(5,174)
|
|
(8,522)
|
|
(6,522)
|
|
(10,121)
|
( - ) Expected credit losses
|
(583,421)
|
|
(457,505)
|
|
(647,057)
|
|
(503,848)
|
|
|
|
|
|
|
|
|
|
6,531,770
|
|
6,104,732
|
|
2,796,567
|
|
3,037,843
|
|
|
|
|
|
|
|
|
Current
|
6,525,316
|
|
6,097,935
|
|
2,790,113
|
|
3,031,046
|
Non-current
|
6,454
|
|
6,797
|
|
6,454
|
|
6,797
|
|
|
|
|
|
|
|
|
Other receivables
|
139,306
|
|
150,156
|
|
144,192
|
|
153,799
|
( - ) Adjustment to present value
|
(1,390)
|
|
(1,936)
|
|
(1,390)
|
|
(1,936)
|
( - ) Expected credit losses
|
(27,498)
|
|
(27,986)
|
|
(27,498)
|
|
(27,986)
|
|
|
|
|
|
|
|
|
|
110,418
|
|
120,234
|
|
115,304
|
|
123,877
|
|
|
|
|
|
|
|
|
Current
|
53,635
|
|
56,002
|
|
58,521
|
|
59,645
|
Non-current (1)
|
56,783
|
|
64,232
|
|
56,783
|
|
64,232
|
|
(1)
|
Weighted average maturity of 2.50 years.
|
The Company performs credit
assignments with no right of return to the BRF Clients’ Credit Rights Investment Fund (“FIDC BRF“), whose sole
purpose is to acquire credit rights arising from commercial transactions carried out between the Company and its clients in Brazil.
On June 30, 2020, FIDC BRF had an outstanding balance of R$650,761 (R$730,251 on December 31, 2019) related to such credit rights,
which are no longer recorded in the Company’s statement of financial position.
On June 30, 2020, other receivables
are mainly represented by receivables from the sale of farms and various properties, with a balance of R$94,575 (R$109,419 on December
31, 2019).
The movements of the expected
credit losses are presented below:
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
06.30.20
|
Beginning balance
|
(457,505)
|
|
(503,848)
|
Provision
|
(9,077)
|
|
(11,790)
|
Write-offs
|
3,704
|
|
3,954
|
Exchange rate variation
|
(120,543)
|
|
(135,373)
|
Ending balance
|
(583,421)
|
|
(647,057)
|
The aging of trade accounts receivable
is as follows:
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Not overdue
|
6,529,758
|
|
6,028,415
|
|
2,541,307
|
|
2,820,308
|
Overdue
|
|
|
|
|
|
|
|
01 to 60 days
|
17,072
|
|
29,232
|
|
234,327
|
|
143,303
|
61 to 90 days
|
2,202
|
|
5,549
|
|
23,589
|
|
19,409
|
91 to 120 days
|
2,787
|
|
1,568
|
|
16,261
|
|
3,723
|
121 to 180 days
|
3,970
|
|
876
|
|
9,200
|
|
3,934
|
181 to 360 days
|
2,565
|
|
5,166
|
|
12,772
|
|
20,748
|
More than 360 days
|
562,011
|
|
499,953
|
|
612,690
|
|
540,387
|
( - ) Adjustment to present value
|
(5,174)
|
|
(8,522)
|
|
(6,522)
|
|
(10,121)
|
( - ) Expected credit losses
|
(583,421)
|
|
(457,505)
|
|
(647,057)
|
|
(503,848)
|
|
6,531,770
|
|
6,104,732
|
|
2,796,567
|
|
3,037,843
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
47
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Finished goods
|
1,624,840
|
|
1,302,419
|
|
3,074,295
|
|
2,257,119
|
Work in progress
|
168,179
|
|
147,022
|
|
171,668
|
|
149,470
|
Raw materials
|
833,198
|
|
721,278
|
|
954,796
|
|
803,520
|
Packaging materials
|
79,442
|
|
57,915
|
|
89,149
|
|
60,715
|
Secondary materials
|
468,102
|
|
367,311
|
|
476,762
|
|
375,744
|
Supplies
|
192,776
|
|
168,248
|
|
229,609
|
|
205,399
|
Imports in transit
|
105,470
|
|
61,021
|
|
105,470
|
|
61,021
|
Other
|
26,103
|
|
5,252
|
|
51,791
|
|
19,266
|
(-) Adjustment to present value
|
(50,315)
|
|
(44,319)
|
|
(50,322)
|
|
(44,338)
|
|
3,447,795
|
|
2,786,147
|
|
5,103,218
|
|
3,887,916
|
The additions and reversals
in the write-down of inventories to the net realizable value of inventories, which were recorded against the Cost of Sales, are
presented in the table below:
|
Parent company
|
|
|
|
|
|
|
|
06.30.20
|
|
Realizable value through sale
|
Impaired inventories
|
Obsolete inventories
|
Total
|
Beginning balance
|
(9,075)
|
|
(37,729)
|
|
(8,416)
|
|
(55,220)
|
Additions
|
(29,257)
|
|
(33,954)
|
|
(1,913)
|
|
(65,124)
|
Reversals
|
25,103
|
|
-
|
|
-
|
|
25,103
|
Write-offs
|
-
|
|
48,724
|
|
1,214
|
|
49,938
|
Ending balance
|
(13,229)
|
|
(22,959)
|
|
(9,115)
|
|
(45,303)
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
06.30.20
|
|
Realizable value through sale
|
Impaired inventories
|
Obsolete inventories
|
Total
|
Beginning balance
|
(10,712)
|
|
(42,526)
|
|
(14,919)
|
|
(68,157)
|
Additions
|
(46,146)
|
|
(40,638)
|
|
(5,284)
|
|
(92,068)
|
Reversals
|
28,888
|
|
-
|
|
-
|
|
28,888
|
Write-offs
|
-
|
|
57,640
|
|
4,413
|
|
62,053
|
Exchange rate variation
|
215
|
|
(219)
|
|
(328)
|
|
(332)
|
Ending balance
|
(27,755)
|
|
(25,743)
|
|
(16,118)
|
|
(69,616)
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
48
|
The live animals are represented
by poultry and pork and segregated into consumables and animals for production. The rollforward of the biological assets are presented
below:
|
Parent
company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
Current
|
|
Non-current
|
|
Live
animals
|
|
Live
animals
|
|
|
|
|
Poultry
|
Pork
|
Total
|
|
Poultry
|
Pork
|
Forests
|
Total
|
Beginning
balance
|
557,773
|
|
987,354
|
|
1,545,127
|
|
350,285
|
|
337,804
|
|
328,553
|
|
1,016,642
|
Additions/Transfer
|
4,369,848
|
|
3,214,326
|
|
7,584,174
|
|
32,856
|
|
164,462
|
|
19,760
|
|
217,078
|
Changes
in fair value (1)
|
961,656
|
|
225,466
|
|
1,187,122
|
|
19,458
|
|
(83,491)
|
|
-
|
|
(64,033)
|
Harvest
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(31,368)
|
|
(31,368)
|
Write-off
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(37)
|
|
(37)
|
Transfer
between current and non-current
|
29,002
|
|
44,059
|
|
73,061
|
|
(29,002)
|
|
(44,059)
|
|
-
|
|
(73,061)
|
Transfer
to assets held for sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
109
|
|
109
|
Transfer
to inventories
|
(5,261,831)
|
|
(3,323,771)
|
|
(8,585,602)
|
|
-
|
|
-
|
|
-
|
|
-
|
Ending
balance
|
656,448
|
|
1,147,434
|
|
1,803,882
|
|
373,597
|
|
374,716
|
|
317,017
|
|
1,065,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
Current
|
|
Non-current
|
|
Live
animals
|
|
Live
animals
|
|
|
|
|
Poultry
|
Pork
|
Total
|
|
Poultry
|
Pork
|
Forests
|
Total
|
Beginning
balance
|
615,685
|
|
987,354
|
|
1,603,039
|
|
414,668
|
|
337,804
|
|
328,553
|
|
1,081,025
|
Additions/Transfer
|
4,375,532
|
|
3,214,326
|
|
7,589,858
|
|
40,967
|
|
164,462
|
|
19,760
|
|
225,189
|
Changes
in fair value (1)
|
965,848
|
|
225,466
|
|
1,191,314
|
|
15,187
|
|
(83,491)
|
|
-
|
|
(68,304)
|
Harvest
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(31,368)
|
|
(31,368)
|
Write-off
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(37)
|
|
(37)
|
Transfer
between current and non-current
|
29,002
|
|
44,059
|
|
73,061
|
|
(29,002)
|
|
(44,059)
|
|
-
|
|
(73,061)
|
Transfer
between held for sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
109
|
|
109
|
Transfer
to inventories
|
(5,261,831)
|
|
(3,323,771)
|
|
(8,585,602)
|
|
-
|
|
-
|
|
-
|
|
-
|
Exchange
variation
|
11,255
|
|
-
|
|
11,255
|
|
12,447
|
|
-
|
|
-
|
|
12,447
|
Ending
balance
|
735,491
|
|
1,147,434
|
|
1,882,925
|
|
454,267
|
|
374,716
|
|
317,017
|
|
1,146,000
|
|
(1)
|
The change in the fair value of biological assets includes depreciation
of breeders and depletion of forests in the amount of R$377,490 (R$728,904 on December 31, 2019) in the parent company and R$420,747
(R$798,239 on December 31, 2019) in the consolidated.
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
49
|
The quantities and balances
of live animal are set forth below:
|
Parent company
|
|
06.30.20
|
|
12.31.19
|
|
Quantity
(thousand of heads)
|
|
Value
|
|
Quantity
(thousand of heads)
|
|
Value
|
Consumable biological assets
|
|
|
|
|
|
|
|
Immature poultry
|
168,267
|
|
656,448
|
|
170,071
|
|
557,773
|
Immature pork
|
4,200
|
|
1,147,434
|
|
4,098
|
|
987,354
|
Total current
|
172,467
|
|
1,803,882
|
|
174,169
|
|
1,545,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production biological assets
|
|
|
|
|
|
|
|
Immature poultry
|
5,789
|
|
126,223
|
|
6,093
|
|
129,837
|
Mature poultry
|
10,188
|
|
247,374
|
|
10,329
|
|
220,448
|
Immature pork
|
90
|
|
86,346
|
|
211
|
|
77,027
|
Mature pork
|
455
|
|
288,370
|
|
455
|
|
260,777
|
Total non-current
|
16,522
|
|
748,313
|
|
17,088
|
|
688,089
|
|
188,989
|
|
2,552,195
|
|
191,257
|
|
2,233,216
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
Quantity
(thousand of heads)
|
|
Value
|
|
Quantity
(thousand of heads)
|
|
Value
|
Consumable biological assets
|
|
|
|
|
|
|
|
Immature poultry
|
187,799
|
|
735,491
|
|
189,602
|
|
615,685
|
Immature pork
|
4,200
|
|
1,147,434
|
|
4,098
|
|
987,354
|
Total current
|
191,999
|
|
1,882,925
|
|
193,700
|
|
1,603,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production biological assets
|
|
|
|
|
|
|
|
Immature poultry
|
6,663
|
|
160,006
|
|
7,042
|
|
160,415
|
Mature poultry
|
11,552
|
|
294,261
|
|
11,554
|
|
254,253
|
Immature pork
|
90
|
|
86,346
|
|
211
|
|
77,027
|
Mature pork
|
455
|
|
288,370
|
|
455
|
|
260,777
|
Total non-current
|
18,760
|
|
828,983
|
|
19,262
|
|
752,472
|
|
210,759
|
|
2,711,908
|
|
212,962
|
|
2,355,511
|
As of June 30, 2020, the Company
has forests pledged as collateral for financing and tax/civil contingencies in the amount of R$84,245 in the parent company and
in the consolidated (R$62,408 in the parent company and in the consolidated at December 31, 2019).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
50
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Recoverable taxes
|
|
|
|
|
|
|
|
ICMS ("State VAT")
|
1,473,619
|
|
1,476,595
|
|
1,710,718
|
|
1,635,664
|
PIS and COFINS ("Federal Taxes to Social Fund Programs")
|
3,157,052
|
|
2,986,235
|
|
3,158,382
|
|
2,990,313
|
IPI ("Federal VAT")
|
869,242
|
|
848,862
|
|
869,245
|
|
848,865
|
INSS ("Brazilian Social Security")
|
257,025
|
|
255,950
|
|
257,031
|
|
255,967
|
Other
|
42,754
|
|
41,048
|
|
43,632
|
|
80,144
|
(-) Impairment on recoverable taxes
|
(179,059)
|
|
(167,194)
|
|
(179,544)
|
|
(167,674)
|
|
5,620,633
|
|
5,441,496
|
|
5,859,464
|
|
5,643,279
|
|
|
|
|
|
|
|
|
Current
|
371,098
|
|
274,480
|
|
609,955
|
|
473,732
|
Non-current
|
5,249,535
|
|
5,167,016
|
|
5,249,509
|
|
5,169,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recoverable income tax and social contribution
|
|
|
|
|
|
|
|
Income and social contribution tax ("IR/CS")
|
160,432
|
|
313,704
|
|
200,007
|
|
430,778
|
(-) Impairment on recoverable taxes
|
(8,985)
|
|
(8,985)
|
|
(9,029)
|
|
(9,029)
|
|
151,447
|
|
304,719
|
|
190,978
|
|
421,749
|
Current
|
60,688
|
|
40,291
|
|
93,781
|
|
152,486
|
Non-current
|
90,759
|
|
264,428
|
|
97,197
|
|
269,263
|
The rollforward of the impairment
on recoverable taxes are set forth below:
|
Parent company
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
ICMS
|
|
PIS and COFINS
|
|
IR/CS
|
|
IPI
|
|
Other
|
|
Total
|
Beginning balance
|
(141,193)
|
|
(16,922)
|
|
(8,985)
|
|
(3,818)
|
|
(5,261)
|
|
(176,179)
|
Additions
|
(25,724)
|
|
-
|
|
-
|
|
(263)
|
|
-
|
|
(25,987)
|
Write-offs
|
5,654
|
|
2,694
|
|
-
|
|
2,097
|
|
3,677
|
|
14,122
|
Ending balance
|
(161,263)
|
|
(14,228)
|
|
(8,985)
|
|
(1,984)
|
|
(1,584)
|
|
(188,044)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
ICMS
|
|
PIS and COFINS
|
|
IR/CS
|
|
IPI
|
|
Other
|
|
Total
|
Beginning balance
|
(141,193)
|
|
(16,922)
|
|
(9,029)
|
|
(3,818)
|
|
(5,741)
|
|
(176,703)
|
Additions
|
(25,724)
|
|
-
|
|
-
|
|
(263.00)
|
|
-
|
|
(25,987)
|
Write-offs
|
5,654
|
|
2,694
|
|
-
|
|
2,097
|
|
3,677
|
|
14,122
|
Exchange rate variation
|
-
|
|
-
|
|
-
|
|
-
|
|
(5)
|
|
(5)
|
Ending balance
|
(161,263)
|
|
(14,228)
|
|
(9,029)
|
|
(1,984)
|
|
(2,069)
|
|
(188,573)
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
51
|
|
10.
|
INCOME AND SOCIAL CONTRIBUTION TAXES
|
|
10.1.
|
Deferred income
and social contribution taxes
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Assets
|
|
|
|
|
|
|
|
Tax loss carryforwards (corporate income tax)
|
1,784,359
|
|
1,780,424
|
|
1,828,398
|
|
1,785,027
|
Negative calculation basis (social contribution tax)
|
676,882
|
|
680,518
|
|
678,953
|
|
682,175
|
|
|
|
|
|
|
|
|
Temporary differences - Assets
|
|
|
|
|
|
|
|
Provisions for tax, civil and labor risks
|
493,962
|
|
477,538
|
|
493,962
|
|
477,538
|
Suspended collection taxes
|
13,409
|
|
31,069
|
|
13,409
|
|
31,069
|
Expected credit losses
|
179,231
|
|
135,219
|
|
179,231
|
|
135,374
|
Impairment on tax credits
|
66,771
|
|
60,771
|
|
66,771
|
|
60,771
|
Provision for other obligations
|
83,578
|
|
93,619
|
|
83,578
|
|
93,619
|
Employees' profit sharing
|
49,551
|
|
66,166
|
|
49,551
|
|
66,166
|
Write-down to net realizable value of inventories
|
15,003
|
|
18,657
|
|
15,003
|
|
18,718
|
Employees' benefits plan
|
212,068
|
|
202,228
|
|
212,068
|
|
202,228
|
Difference on tax x accounting basis for leases
|
58,950
|
|
37,492
|
|
58,950
|
|
37,492
|
Unrealized losses on fair value measurement
|
193,200
|
|
-
|
|
193,200
|
|
-
|
Adjustment to estimated annual effective tax rate - CPC 21
|
275,051
|
|
-
|
|
275,051
|
|
-
|
Other temporary differences
|
32,927
|
|
35,568
|
|
33,246
|
|
66,458
|
|
4,134,942
|
|
3,619,269
|
|
4,181,371
|
|
3,656,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences - Liabilities
|
|
|
|
|
|
|
|
Unrealized fair value gains
|
-
|
|
(11,998)
|
|
-
|
|
(11,998)
|
Difference on tax x accounting basis for goodwill amortization
|
(320,160)
|
|
(319,592)
|
|
(320,160)
|
|
(319,592)
|
Difference on tax x accounting basis for depreciation (useful life)
|
(829,223)
|
|
(802,844)
|
|
(829,223)
|
|
(802,844)
|
Business combination - Sadia (1)
|
(668,458)
|
|
(622,203)
|
|
(691,855)
|
|
(640,318)
|
Unrealized gains on derivatives
|
(171,167)
|
|
(43,428)
|
|
(171,167)
|
|
(43,428)
|
Other - exchange rate variation
|
-
|
|
-
|
|
(85,957)
|
|
(69,142)
|
Other temporary differences
|
(14,052)
|
|
(10,710)
|
|
(23,539)
|
|
(8,761)
|
|
(2,003,060)
|
|
(1,810,775)
|
|
(2,121,901)
|
|
(1,896,083)
|
|
|
|
|
|
|
|
|
Total deferred tax
|
2,131,882
|
|
1,808,494
|
|
2,059,470
|
|
1,760,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
2,131,882
|
|
1,808,494
|
|
2,180,059
|
|
1,845,862
|
Total Liabilities
|
-
|
|
-
|
|
(120,589)
|
|
(85,310)
|
|
2,131,882
|
|
1,808,494
|
|
2,059,470
|
|
1,760,552
|
|
(1)
|
The deferred tax asset on the Sadia business combination was recorded
on the amortization difference between the accounting and tax goodwill calculated as of the purchase price allocation date. The
deferred tax liability on the Sadia business combination is substantially represented by the allocation of goodwill to property,
plant and equipment, brands and contingent liabilities.
|
The roll-forward of deferred
tax assets is set forth below:
|
Parent company
|
|
Consolidated
|
|
January to June 2020
|
|
January to June 2020
|
|
|
|
|
Beginning balance
|
1,808,494
|
|
1,760,552
|
Deferred income and social contribution recognized in the statement of income
|
(51,766)
|
|
(76,197)
|
Deferred income and social contribution recognized in other comprehensive income
|
374,855
|
|
374,855
|
Other
|
299
|
|
260
|
Ending balance
|
2,131,882
|
|
2,059,470
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
52
|
|
10.2.
|
Estimated
period of realization
|
Deferred tax assets arising
from temporary differences will be realized as they are settled or realized. The period of settlement or realization of such differences
is subject to externalities and is linked to several factors that are not under the control of Management.
In estimating the realization
of deferred tax credits recorded on tax losses and negative social contribution basis, Management considers its budget and strategic
plans, adjusted based on the estimates of the main tax additions and exclusions, which were approved by the Board of Directors,
as recommended by the Company’s Fiscal Council. Based on this estimate, Management believes that it is probable that these
deferred tax credits will be realized, as shown below:
|
Parent company
|
|
Consolidated
|
2021
|
100,037
|
|
100,037
|
2022
|
159,307
|
|
159,307
|
2023
|
267,209
|
|
267,209
|
2024
|
291,568
|
|
291,568
|
2025 to 2027
|
945,298
|
|
945,298
|
2028 onwards
|
697,822
|
|
743,932
|
|
2,461,241
|
|
2,507,351
|
The deferred tax credits on
tax losses and negative social contribution basis related to the parent company and its subsidiaries domiciled in Brazil do not
expire.
|
10.3.
|
Income
and social contribution taxes reconciliation
|
|
Parent
company
|
|
Consolidated
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income and social contribution taxes – continued operations
|
406,100
|
|
309,715
|
|
249,485
|
|
(52,715)
|
|
396,884
|
|
345,094
|
|
310,719
|
|
20,652
|
Nominal
tax rate
|
34%
|
|
34%
|
|
34%
|
|
34%
|
|
34%
|
|
34%
|
|
34%
|
|
34%
|
Credit
(expense) at nominal rate
|
(138,074)
|
|
(105,303)
|
|
(84,825)
|
|
17,923
|
|
(134,941)
|
|
(117,332)
|
|
(105,644)
|
|
(7,022)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from associates and joint ventures
|
709,328
|
|
2,064,994
|
|
46,808
|
|
119,013
|
|
-
|
|
-
|
|
(12,635)
|
|
(16,691)
|
Difference
of tax rates on results of foreign subsidiaries
|
-
|
|
-
|
|
-
|
|
-
|
|
435,282
|
|
998,676
|
|
35,600
|
|
106,590
|
Difference
of funcional currency of foreign subsidiaries
|
-
|
|
-
|
|
-
|
|
-
|
|
283,238
|
|
1,053,917
|
|
(13,439)
|
|
(17,333)
|
Deferred
tax assets not recognized (1)
|
(958,804)
|
|
(2,291,220)
|
|
26,427
|
|
(27,909)
|
|
(958,804)
|
|
(2,291,220)
|
|
26,427
|
|
(27,909)
|
Penalties
|
(2,117)
|
|
(6,181)
|
|
885
|
|
702
|
|
(2,117)
|
|
(6,181)
|
|
886
|
|
702
|
Investment
grant
|
8,980
|
|
19,514
|
|
30,689
|
|
30,689
|
|
8,980
|
|
19,514
|
|
30,689
|
|
30,689
|
Estimated
annual effective tax rate - CPC 21
|
279,691
|
|
275,051
|
|
(201,796)
|
|
(4,837)
|
|
279,691
|
|
275,051
|
|
(201,796)
|
|
(4,837)
|
Reversal
(recognition) of provision with no deferred tax constituted
|
-
|
|
-
|
|
109,251
|
|
(21,139)
|
|
-
|
|
-
|
|
109,251
|
|
(21,139)
|
Other
permanent differences
|
(1,234)
|
|
(8,621)
|
|
10,970
|
|
14,104
|
|
(1,084)
|
|
(8,622)
|
|
10,965
|
|
14,043
|
|
(102,230)
|
|
(51,766)
|
|
(61,591)
|
|
128,546
|
|
(89,755)
|
|
(76,197)
|
|
(119,696)
|
|
57,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
income tax
|
-
|
|
-
|
|
-
|
|
-
|
|
(21,983)
|
|
(38,332)
|
|
(62,738)
|
|
(86,838)
|
Deferred
income tax
|
(102,230)
|
|
(51,766)
|
|
(61,591)
|
|
128,546
|
|
(67,772)
|
|
(37,865)
|
|
(56,958)
|
|
143,931
|
|
(1)
|
Amount related to the non-recognition of deferred tax on tax losses
and negative basis in the amount of R$6,738,883 in the parent company and in the consolidated, due to limited capacity of realization
(note 10.2).
|
The Company’s management
determined that the total profits recorded by the holdings of its wholly owned subsidiaries abroad will not be redistributed. Such
funds will be used for investments in the wholly owned subsidiaries.
Income tax returns in Brazil
are subject to review by the tax authorities for a period of five years from the date of their delivery. The Company may be subject
to additional collection of taxes, fines and interest as a result of these reviews. The results obtained by wholly owned subsidiaries
abroad are subject to taxation in accordance with the tax laws of each country.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
53
|
The rollforward of the judicial
deposits is set forth below:
|
Parent company
|
|
|
|
|
|
|
|
06.30.20
|
|
Tax
|
Labor
|
Civil, commercial and other
|
Total
|
Beginning balance
|
244,977
|
|
301,739
|
|
28,965
|
|
575,681
|
Additions
|
-
|
|
63,168
|
|
4,414
|
|
67,582
|
Reversals
|
(10,747)
|
|
(22,308)
|
|
(61)
|
|
(33,116)
|
Write-offs
|
(907)
|
|
(55,866)
|
|
(357)
|
|
(57,130)
|
Interest
|
2,863
|
|
4,183
|
|
406
|
|
7,452
|
Ending balance
|
236,186
|
|
290,916
|
|
33,367
|
|
560,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
06.30.20
|
|
Tax
|
Labor
|
Civil, commercial and other
|
Total
|
Beginning balance
|
244,977
|
|
301,808
|
|
28,965
|
|
575,750
|
Additions
|
-
|
|
63,168
|
|
4,414
|
|
67,582
|
Reversals
|
(10,747)
|
|
(22,308)
|
|
(61)
|
|
(33,116)
|
Write-offs
|
(907)
|
|
(55,866)
|
|
(357)
|
|
(57,130)
|
Interest
|
2,863
|
|
4,183
|
|
406
|
|
7,452
|
Exchange rate variation
|
-
|
|
11
|
|
-
|
|
11
|
Ending balance
|
236,186
|
|
290,996
|
|
33,367
|
|
560,549
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
54
|
The rollforward of the direct
investments in subsidiaries and affiliates of the parent company is set forth below:
|
Subsidiaries
|
|
Affiliates
|
|
|
|
|
BRF
Energia S.A.
|
|
BRF
GmbH
|
|
Establec.
Levino Zaccardi
|
|
BRF
Pet S.A.
|
|
BRF
Austria GmbH
|
|
PSA
Labor. Veter. Ltda
|
|
Sadia
Alimentos S.A.
|
|
Proud
Food Lda
|
|
Sadia
International Ltd.
|
|
Sadia
Uruguay S.A.
|
|
Eclipse
Holding Cooperatief
|
|
VIP
S.A. Empr. e Particip. Imob
|
|
PP-BIO
Adm. Bem próprio S.A.
|
|
PR-SAD
Adm. Bem próprio S.A.
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
12.31.19
|
a)
Participation as of june 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
of participation
|
100.00%
|
|
100.00%
|
|
99.94%
|
|
100.00%
|
|
100.00%
|
|
99.99%
|
|
43.10%
|
|
10.00%
|
|
100.00%
|
|
94.90%
|
|
0.01%
|
|
100.00%
|
|
33.33%
|
|
33.33%
|
|
|
|
|
Total
quantity of shares and quotas
|
7,176,530
|
|
1
|
|
100
|
|
18,741,856
|
|
100
|
|
5,463,850
|
|
594,576,682
|
|
150,000
|
|
900,000
|
|
2,444,753,091
|
|
10,000
|
|
14,249,459
|
|
-
|
|
-
|
|
|
|
|
Quantity
of shares and quotas held
|
7,176,530
|
|
1
|
|
100
|
|
18,741,856
|
|
100
|
|
5,463,849
|
|
256,253,695
|
|
15,000
|
|
900,000
|
|
2,319,989,778
|
|
1
|
|
14,249,459
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
b)
Information as of june 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
7,177
|
|
6,523
|
|
1,186
|
|
32,664
|
|
120
|
|
5,564
|
|
338,054
|
|
3
|
|
2,933
|
|
497,012
|
|
334,999
|
|
50
|
|
-
|
|
-
|
|
|
|
|
Shareholders'
equity
|
607
|
|
11,337,111
|
|
(305)
|
|
19,698
|
|
135,707
|
|
5,369
|
|
9,786
|
|
(254)
|
|
313,739
|
|
90,068
|
|
(29,937)
|
|
2,382
|
|
-
|
|
-
|
|
|
|
|
Income
(loss) for the year
|
(423)
|
|
2,561,650
|
|
(175)
|
|
(4,316)
|
|
477,442
|
|
(195)
|
|
(2,890)
|
|
(141)
|
|
(2,652)
|
|
(4,179)
|
|
(708)
|
|
26
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c)
Movements of investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance (12.31.19)
|
1,031
|
|
6,148,777
|
|
-
|
|
19,083
|
|
-
|
|
5,564
|
|
4,791
|
|
-
|
|
235,307
|
|
74,821
|
|
-
|
|
2,355
|
|
2,354
|
|
4,851
|
|
6,498,934
|
|
4,042,451
|
Result
Movements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss)
|
(423)
|
|
5,538,499
|
|
(163)
|
|
(4,385)
|
|
477,566
|
|
(195)
|
|
21
|
|
(14)
|
|
66,742
|
|
(4,162)
|
|
-
|
|
26
|
|
-
|
|
-
|
|
6,073,512
|
|
1,186,569
|
Dividends
and interests on shareholders' equity
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(8,665)
|
Capital
movements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
increase
|
-
|
|
-
|
|
-
|
|
5,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
121
|
|
426
|
|
5,547
|
|
2,385
|
Capital
transaction between subsidiaries
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,314,596
|
Acquisition
(sale) of equity interest
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(67,444)
|
Liquidation
of subsidiary
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
90,834
|
Goodwill
on acquisition of non-controlling interests
|
-
|
|
-
|
|
-
|
|
-
|
|
(50,945)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(50,945)
|
|
-
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income
|
-
|
|
(350,166)
|
|
(30)
|
|
-
|
|
(162,268)
|
|
-
|
|
(595)
|
|
(1)
|
|
11,690
|
|
14,785
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
(486,586)
|
|
(81,086)
|
Provision
for losses on investments
|
-
|
|
-
|
|
193
|
|
-
|
|
-
|
|
-
|
|
-
|
|
15
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
209
|
|
128,757
|
Reversal
of provision for losses on investments
|
-
|
|
-
|
|
-
|
|
-
|
|
(128,646)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(128,646)
|
|
(109,463)
|
Ending
balance (06.30.20)
|
608
|
|
11,337,110
|
|
-
|
|
19,698
|
|
135,707
|
|
5,369
|
|
4,217
|
|
-
|
|
313,739
|
|
85,444
|
|
-
|
|
2,381
|
|
2,475
|
|
5,277
|
|
11,912,025
|
|
6,498,934
|
The Company owns other investments
in the amount of R$583 in the parent company and R$10,049 in the consolidated (R$583 at parent company and R$7,676 in the consolidated
as of December 31, 2019).
On June 30, 2020, these associates,
affiliates and joint ventures do not have any restriction to amortize their loans or advances to the Company.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
55
|
|
13.
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
The rollforward of property,
plant and equipment is set forth below:
|
Parent
company
|
|
Weighted
average depreciation rate (p.a.)
|
|
12.31.19
|
|
Additions
|
|
Disposals
|
|
Transfers
(1)
|
|
06.30.20
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
546,976
|
|
-
|
|
(5,945)
|
|
21,519
|
|
562,550
|
Buildings,
facilities and improvements
|
|
|
9,558,475
|
|
81,210
|
|
(30,617)
|
|
77,614
|
|
9,686,682
|
Machinery
and equipment
|
|
|
7,669,528
|
|
2,939
|
|
(51,718)
|
|
115,064
|
|
7,735,813
|
Furniture
and fixtures
|
|
|
101,855
|
|
193
|
|
(584)
|
|
5,067
|
|
106,531
|
Vehicles
|
|
|
121,079
|
|
16,625
|
|
(7,633)
|
|
(87)
|
|
129,984
|
Construction
in progress
|
|
|
335,872
|
|
272,645
|
|
-
|
|
(257,496)
|
|
351,021
|
Advances
to suppliers
|
|
|
-
|
|
141
|
|
-
|
|
-
|
|
141
|
|
|
|
18,333,785
|
|
373,753
|
|
(96,497)
|
|
(38,319)
|
|
18,572,722
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
Land
(2)
|
20.77%
|
|
(4,258)
|
|
(3,085)
|
|
37
|
|
(1,799)
|
|
(9,105)
|
Buildings,
facilities and improvements
|
9.53%
|
|
(3,126,532)
|
|
(294,102)
|
|
18,977
|
|
(5,307)
|
|
(3,406,964)
|
Machinery
and equipment
|
6.65%
|
|
(3,790,298)
|
|
(224,938)
|
|
28,962
|
|
1,341
|
|
(3,984,933)
|
Furniture
and fixtures
|
6.67%
|
|
(54,854)
|
|
(2,556)
|
|
454
|
|
48
|
|
(56,908)
|
Vehicles
|
27.85%
|
|
(24,541)
|
|
(18,130)
|
|
1,041
|
|
84
|
|
(41,546)
|
|
|
|
(7,000,483)
|
|
(542,811)
|
|
49,471
|
|
(5,633)
|
|
(7,499,456)
|
|
|
|
11,333,302
|
|
(169,058)
|
|
(47,026)
|
|
(43,952)
|
|
11,073,266
|
|
(1)
|
Refers to the transfer
of R$39,532 for intangible assets, R$4,413 for assets held for sale and R$7 for biological assets.
|
|
(2)
|
Land depreciation refers
to right-of-use assets. The amount of R$2,095 of depreciation was recognized in the cost of formation of forests and will be realized
in the result according to the depletion (note 18.1).
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
56
|
|
Consolidated
|
|
Weighted
average depreciation rate (p.a.)
|
|
12.31.19
|
|
Additions
|
|
Disposals
|
|
Transfers
(1)
|
|
Exchange
rate variation
|
|
06.30.20
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
603,479
|
|
1,321
|
|
(6,514)
|
|
20,303
|
|
12,398
|
|
630,987
|
Buildings,
facilities and improvements
|
|
|
10,148,798
|
|
133,333
|
|
(51,720)
|
|
76,936
|
|
202,541
|
|
10,509,888
|
Machinery
and equipment
|
|
|
8,177,047
|
|
19,755
|
|
(54,369)
|
|
116,851
|
|
128,623
|
|
8,387,907
|
Furniture
and fixtures
|
|
|
140,439
|
|
193
|
|
(640)
|
|
8,621
|
|
16,057
|
|
164,670
|
Vehicles
|
|
|
213,199
|
|
19,530
|
|
(51,994)
|
|
(1,360)
|
|
33,010
|
|
212,385
|
Construction
in progress
|
|
|
348,907
|
|
264,438
|
|
-
|
|
(259,810)
|
|
2,359
|
|
355,894
|
Advances
to suppliers
|
|
|
528
|
|
1,743
|
|
-
|
|
139
|
|
111
|
|
2,521
|
|
|
|
19,632,397
|
|
440,313
|
|
(165,237)
|
|
(38,320)
|
|
395,099
|
|
20,264,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
(2)
|
22.31%
|
|
(5,086)
|
|
(3,107)
|
|
605
|
|
(1,799)
|
|
(727)
|
|
(10,114)
|
Buildings,
facilities and improvements
|
9.06%
|
|
(3,263,801)
|
|
(336,046)
|
|
40,046
|
|
(10,968)
|
|
(49,301)
|
|
(3,620,070)
|
Machinery
and equipment
|
6.60%
|
|
(3,950,250)
|
|
(247,080)
|
|
30,368
|
|
10,703
|
|
(47,715)
|
|
(4,203,974)
|
Furniture
and fixtures
|
6.67%
|
|
(71,779)
|
|
(5,807)
|
|
496
|
|
(745)
|
|
(5,379)
|
|
(83,214)
|
Vehicles
|
27.34%
|
|
(64,592)
|
|
(36,153)
|
|
39,287
|
|
(2,823)
|
|
(17,002)
|
|
(81,283)
|
|
|
|
(7,355,508)
|
|
(628,193)
|
|
110,802
|
|
(5,632)
|
|
(120,124)
|
|
(7,998,655)
|
|
|
|
12,276,889
|
|
(187,880)
|
|
(54,435)
|
|
(43,952)
|
|
274,975
|
|
12,265,597
|
|
(1)
|
Refers to the transfer
of R$39,532 for intangible assets, R$4,413 to held for sale and R$7 for biological assets.
|
|
(2)
|
Land depreciation refers
to right-of-use assets. The amount of R$2,095 of depreciation was recognized in the cost of formation of forests and will be realized
in the result according to the depletion (note 18.1).
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
57
|
The amount of capitalized borrowing
costs during the six-month period ended on June 30, 2020 was of R$8,388 in the parent company and in the consolidated (R$10,543
in the parent company and in the consolidated in the same period of the previous year) and during the three-month period ended
on June 30, 2020 was of R$4,330 in the parent company and in the consolidated (R$5,241 in the parent company and R$5,219 in the
consolidated in the same period of the previous year).
The weighted average rate used
to determine the amount of borrowing costs subject to capitalization was 6.09% p.a. in the parent company and in the consolidated
(6.41% p.a. in the parent company and 2.32% in the consolidated in the same period of the previous year).
The book value of the property,
plant and equipment items that are pledged as collateral for transactions of different natures are set forth below:
|
|
|
|
Parent company and Consolidated
|
|
|
Type of collateral
|
|
06.30.20
|
|
12.31.19
|
Land
|
|
Financial/Tax
|
|
225,127
|
|
221,727
|
Buildings, facilities and improvements
|
|
Financial/Tax
|
|
1,487,465
|
|
1,499,808
|
Machinery and equipment
|
|
Financial/Labor/Tax/Civil
|
|
1,459,453
|
|
1,488,889
|
Furniture and fixtures
|
|
Financial/Tax
|
|
15,364
|
|
14,090
|
Vehicles
|
|
Financial/Tax
|
|
358
|
|
369
|
|
|
|
|
3,187,767
|
|
3,224,883
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
58
|
The intangible assets rollforward
is set forth below:
|
|
|
Parent
company
|
|
Weighted
average amortization rate (p.a.)
|
|
12.31.19
|
|
Additions
|
|
Disposals
|
|
Transfers
|
|
06.30.20
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
1,783,655
|
|
-
|
|
-
|
|
-
|
|
1,783,655
|
Trademarks
|
|
|
1,152,885
|
|
-
|
|
-
|
|
-
|
|
1,152,885
|
Non-compete
agreement
|
|
|
71,729
|
|
-
|
|
(379)
|
|
-
|
|
71,350
|
Outgrowers
relationship
|
|
|
14,604
|
|
-
|
|
-
|
|
-
|
|
14,604
|
Patents
|
|
|
6,205
|
|
-
|
|
-
|
|
-
|
|
6,205
|
Software
|
|
|
491,682
|
|
72,766
|
|
(35,744)
|
|
70,775
|
|
599,479
|
Intangible
in progress
|
|
|
11,450
|
|
57,321
|
|
-
|
|
(39,784)
|
|
28,987
|
|
|
|
3,532,210
|
|
130,087
|
|
(36,123)
|
|
30,991
|
|
3,657,165
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
|
|
|
|
|
|
|
|
|
Non-compete
agreement
|
35.65%
|
|
(57,690)
|
|
(6,946)
|
|
379
|
|
-
|
|
(64,257)
|
Outgrowers
relationship
|
13.09%
|
|
(12,744)
|
|
(593)
|
|
-
|
|
-
|
|
(13,337)
|
Patents
|
19.05%
|
|
(5,524)
|
|
(237)
|
|
-
|
|
-
|
|
(5,761)
|
Software
|
32.44%
|
|
(316,720)
|
|
(61,896)
|
|
35,744
|
|
8,540
|
|
(334,332)
|
|
|
|
(392,678)
|
|
(69,672)
|
|
36,123
|
|
8,540
|
|
(417,687)
|
|
|
|
3,139,532
|
|
60,415
|
|
-
|
|
39,531
|
|
3,239,478
|
|
|
|
Consolidated
|
|
Weighted
average amortization rate (p.a.)
|
|
12.31.19
|
|
Additions
|
|
Disposals
|
|
Transfers
|
|
Exchange
rate variation
|
|
06.30.20
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
2,713,602
|
|
-
|
|
-
|
|
-
|
|
298,138
|
|
3,011,740
|
Trademarks
|
|
|
1,322,262
|
|
-
|
|
-
|
|
-
|
|
30,333
|
|
1,352,595
|
Non-compete
agreement
|
|
|
99,229
|
|
-
|
|
(379)
|
|
-
|
|
9,485
|
|
108,335
|
Outgrowers
relationship
|
|
|
14,604
|
|
-
|
|
-
|
|
-
|
|
-
|
|
14,604
|
Patents
|
|
|
6,305
|
|
-
|
|
(106)
|
|
-
|
|
6
|
|
6,205
|
Customer
relationship
|
|
|
892,758
|
|
-
|
|
-
|
|
-
|
|
255,491
|
|
1,148,249
|
Software
|
|
|
523,615
|
|
74,453
|
|
(35,771)
|
|
71,744
|
|
10,437
|
|
644,478
|
Intangible
in progress
|
|
|
12,151
|
|
57,380
|
|
-
|
|
(40,752)
|
|
208
|
|
28,987
|
|
|
|
5,584,526
|
|
131,833
|
|
(36,256)
|
|
30,992
|
|
604,098
|
|
6,315,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compete
agreement
|
27.10%
|
|
(74,190)
|
|
(10,285)
|
|
379
|
|
-
|
|
(6,051)
|
|
(90,147)
|
Outgrowers
relationship
|
13.09%
|
|
(12,744)
|
|
(593)
|
|
-
|
|
-
|
|
-
|
|
(13,337)
|
Patents
|
19.05%
|
|
(5,626)
|
|
(237)
|
|
106
|
|
-
|
|
(14)
|
|
(5,771)
|
Customer
relationship
|
7.34%
|
|
(242,263)
|
|
(39,177)
|
|
-
|
|
-
|
|
(76,955)
|
|
(358,395)
|
Software
|
32.06%
|
|
(341,624)
|
|
(64,662)
|
|
35,771
|
|
8,540
|
|
(8,677)
|
|
(370,652)
|
|
|
|
(676,447)
|
|
(114,954)
|
|
36,256
|
|
8,540
|
|
(91,697)
|
|
(838,302)
|
|
|
|
4,908,079
|
|
16,879
|
|
-
|
|
39,532
|
|
512,401
|
|
5,476,891
|
During the six-month period
ended on June 30, 2020, Management did not identify any event that could indicate an impairment of such assets.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
59
|
|
Parent
company
|
|
Charges
(p.a.)
|
|
Weighted
average
interest rate (p.a.)
|
|
WAMT
(1)
|
|
12.31.19
|
|
Borrowing
|
|
Amortization
|
|
Interest
paid
|
|
Interest
accrued
|
|
Exchange
rate variation
|
|
06.30.20
|
Local
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
capital
|
Fixed
/ CDI
|
|
3.74%
(6.07% on 12.31.19)
|
|
0.9
|
|
3,312,639
|
|
800,000
|
|
(930,218)
|
|
(96,045)
|
|
101,284
|
|
-
|
|
3,187,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificate
of agribusiness receivables (2)
|
CDI
/ IPCA
|
|
5.03%
(6.73% on 12.31.19)
|
|
2.0
|
|
1,597,447
|
|
-
|
|
-
|
|
(23,819)
|
|
42,575
|
|
-
|
|
1,616,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
bank credit lines
|
Fixed
/ Selic / TJLP
|
|
(5.09%
on 12.31.19)
|
|
-
|
|
45,516
|
|
-
|
|
(45,470)
|
|
(427)
|
|
381
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Export
credit facility (3)
|
Fixed
/ CDI / USD
|
|
5.58%
|
|
5.4
|
|
1,612,365
|
|
1,492,084
|
|
-
|
|
(45,408)
|
|
79,214
|
|
483,672
|
|
3,621,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
program asset restructuring
|
IGPM
|
|
(12.22%
on 12.31.19)
|
|
-
|
|
284,308
|
|
-
|
|
(287,621)
|
|
(5,142)
|
|
8,455
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures
|
CDI
/ IPCA
|
|
5.63%
(7.40% on 12.31.19)
|
|
5.5
|
|
755,760
|
|
-
|
|
-
|
|
(20,579)
|
|
21,835
|
|
-
|
|
757,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
incentives
|
Fixed
|
|
2.40%
(2.40% on 12.31.19)
|
|
-
|
|
5,720
|
|
34,532
|
|
-
|
|
(338)
|
|
367
|
|
-
|
|
40,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,613,755
|
|
2,326,616
|
|
(1,263,309)
|
|
(191,758)
|
|
254,111
|
|
483,672
|
|
9,223,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
Fixed
/ USD / EUR
|
|
4.37%
(4.36% on 12.31.19)
|
|
5.3
|
|
8,407,975
|
|
(275)
|
|
-
|
|
(270,264)
|
|
281,185
|
|
3,058,442
|
|
11,477,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Export
credit facility
|
Fixed
/ LIBOR / USD
|
|
4.13%
(5.77% on 12.31.19)
|
|
2.7
|
|
407,274
|
|
-
|
|
(118,113)
|
|
(12,782)
|
|
10,328
|
|
127,617
|
|
414,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances
for foreign exchange rate contracts
|
Fixed
/ USD
|
|
3.88
|
|
0.8
|
|
-
|
|
529,211
|
|
-
|
|
-
|
|
4,262
|
|
17,865
|
|
551,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,815,249
|
|
528,936
|
|
(118,113)
|
|
(283,046)
|
|
295,775
|
|
3,203,924
|
|
12,442,725
|
|
|
|
|
|
|
|
16,429,004
|
|
2,855,552
|
|
(1,381,422)
|
|
(474,804)
|
|
549,886
|
|
3,687,596
|
|
21,665,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
3,033,034
|
|
|
|
|
|
|
|
|
|
|
|
3,935,263
|
Non-current
|
|
|
|
|
|
|
13,395,970
|
|
|
|
|
|
|
|
|
|
|
|
17,730,549
|
|
(1)
|
Weighted average maturity
in years.
|
|
(2)
|
The Certificates of Agribusiness
Receivables (“CRA”) issued by the Company are backed by receivables of BRF S.A. from certain subsidiaries abroad.
|
|
(3)
|
The Export Credit Facility
was issued in Reais simultaneously and in connection with a foreign exchange rate swap, resulting essentially in a net cash
flow in U.S. Dollars. As the transactions are inseparable, both are recorded together under Loans and Borrowings by their
amortized cost.
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
60
|
|
Consolidated
|
|
Charges
(p.a.)
|
|
Weighted
average
interest rate (p.a.)
|
|
WAMT
(1)
|
|
12.31.19
|
|
Borrowing
|
|
Amortization
|
|
Interest
paid
|
|
Interest
accrued
|
|
Exchange
rate variation
|
|
06.30.20
|
Local
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
capital
|
Fixed
/ CDI
|
|
3.74%
(6.07% on 12.31.19)
|
|
0.9
|
|
3,312,639
|
|
800,000
|
|
(930,218)
|
|
(96,045)
|
|
101,284
|
|
-
|
|
3,187,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificate
of agribusiness receivables (2)
|
CDI
/ IPCA
|
|
5.03%
(6.73% on 12.31.19)
|
|
2.0
|
|
1,597,447
|
|
-
|
|
-
|
|
(23,819)
|
|
42,575
|
|
-
|
|
1,616,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
bank credit lines
|
Fixed
/ Selic / TJLP
|
|
(5.09%
on 12.31.19)
|
|
-
|
|
45,516
|
|
-
|
|
(45,470)
|
|
(427)
|
|
381
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures
|
CDI
/ IPCA
|
|
5.63%
(7.40% on 12.31.19)
|
|
5.5
|
|
755,760
|
|
-
|
|
-
|
|
(20,579)
|
|
21,835
|
|
-
|
|
757,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Export
credit facility (3)
|
Fixed
/ CDI / USD
|
|
4.58%
|
|
5.4
|
|
1,612,365
|
|
1,492,084
|
|
-
|
|
(45,408)
|
|
79,214
|
|
483,672
|
|
3,621,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
program asset restructuring
|
IGPM
|
|
(12.22%
on 12.31.19)
|
|
-
|
|
284,308
|
|
-
|
|
(287,621)
|
|
(5,142)
|
|
8,455
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
incentives
|
Fixed
|
|
2.40%
(2.40% on 12.31.19)
|
|
-
|
|
5,720
|
|
34,532
|
|
-
|
|
(338)
|
|
367
|
|
-
|
|
40,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,613,755
|
|
2,326,616
|
|
(1,263,309)
|
|
(191,758)
|
|
254,111
|
|
483,672
|
|
9,223,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
Fixed
/ USD / EUR
|
|
4.37%
(4.36% on 12.31.19)
|
|
5.5
|
|
10,407,484
|
|
(275)
|
|
-
|
|
(326,755)
|
|
316,917
|
|
3,799,257
|
|
14,196,628
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Export
credit facility
|
Fixed
/ LIBOR / USD
|
|
4.13%
(5.77% on 12.31.19)
|
|
2.7
|
|
407,275
|
|
-
|
|
(118,113)
|
|
(12,782)
|
|
10,328
|
|
127,616
|
|
414,324
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances
for foreign exchange rate contracts
|
Fixed
/ USD
|
|
3.88
|
|
0.8
|
|
-
|
|
529,211
|
|
-
|
|
-
|
|
4,262
|
|
17,865
|
|
551,338
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
capital
|
Fixed
/ TRY
|
|
10.19%
(16.56% on 12.31.19)
|
|
1.4
|
|
191,765
|
|
502,233
|
|
(258,346)
|
|
(22,146)
|
|
23,294
|
|
41,374
|
|
478,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,006,524
|
|
1,031,169
|
|
(376,459)
|
|
(361,683)
|
|
354,801
|
|
3,986,112
|
|
15,640,464
|
|
|
|
|
|
|
|
18,620,279
|
|
3,357,785
|
|
(1,639,768)
|
|
(553,441)
|
|
608,912
|
|
4,469,784
|
|
24,863,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
3,132,029
|
|
|
|
|
|
|
|
|
|
|
|
4,071,950
|
Non-current
|
|
|
|
|
|
|
15,488,250
|
|
|
|
|
|
|
|
|
|
|
|
20,791,601
|
|
(1)
|
Weighted average maturity
in years.
|
|
(2)
|
The Certificate of Agribusiness
Receivable (“CRA”) issued by the Company are backed by receivables of BRF S.A. from certain subsidiaries abroad.
|
The Export Credit
Facility was issued in Reais simultaneously and in connection with a foreign exchange rate swap, resulting essentially in
a net cash flow in U.S. Dollars. As the transactions are inseparable, both are recorded together under Loans and Borrowings
by their amortized cost.
As of December 31, 2019 and
June 30, 2020, the Company did not have any financial covenant clauses related to its loans and borrowings agreements.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
61
|
|
15.1.
|
Revolving
Credit Facility
|
With the purpose of maintaining
a prudential and sustainable short-term liquidity position, continuing with the strategy of extending its average debt maturity
and reducing the cost of debt, on December 27, 2019, the Company retained from Banco do Brasil a revolving credit facility up to
the limit of R$1,500,000 for a period of three years. The referenced credit facility can be disbursed totally or partially, at
the Company’s will, whenever necessary. As of June 30, 2020, the facility was available, but unused.
|
15.2.
|
Loans
and borrowings maturity schedule
|
The maturity schedule of the
loans and borrowings is as follows:
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
06.30.20
|
Current
|
3,935,263
|
|
4,071,950
|
Non-current
|
17,730,549
|
|
20,791,601
|
July to december 2021
|
1,850,633
|
|
1,959,689
|
2022
|
3,365,885
|
|
3,600,786
|
2023
|
3,157,481
|
|
3,157,739
|
2024
|
3,167,562
|
|
3,159,866
|
2025 onwards
|
6,188,988
|
|
8,913,521
|
|
21,665,812
|
|
24,863,551
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Total of loans and financing
|
21,665,812
|
|
16,429,004
|
|
24,863,551
|
|
18,620,279
|
Mortgage guarantees
|
40,281
|
|
51,237
|
|
40,281
|
|
51,237
|
Related to FINEM-BNDES
|
-
|
|
45,516
|
|
-
|
|
45,516
|
Related to tax incentives and other
|
40,281
|
|
5,721
|
|
40,281
|
|
5,721
|
On
June 30, 2020, the amount of bank guarantees contracted by the Company was of R$593,028 (R$666,335
as of December 31, 2019) which were offered mainly in litigations involving the Company’s use of tax credits. These guarantees
have an average cost of 1.79% p.a. (1.77% p.a. as of December 31, 2019).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
62
|
|
16.
|
TRADE ACCOUNTS PAYABLE
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Domestic suppliers
|
|
|
|
|
|
|
|
Third parties
|
5,460,334
|
|
4,921,902
|
|
5,472,974
|
|
4,930,424
|
Related parties
|
9,850
|
|
6,392
|
|
-
|
|
-
|
|
5,470,184
|
|
4,928,294
|
|
5,472,974
|
|
4,930,424
|
|
|
|
|
|
|
|
|
Foreign suppliers
|
|
|
|
|
|
|
|
Third parties
|
556,241
|
|
404,068
|
|
1,320,280
|
|
915,611
|
|
556,241
|
|
404,068
|
|
1,320,280
|
|
915,611
|
|
|
|
|
|
|
|
|
(-) Adjustment to present value
|
(60,020)
|
|
(49,253)
|
|
(60,041)
|
|
(49,269)
|
|
5,966,405
|
|
5,283,109
|
|
6,733,213
|
|
5,796,766
|
|
|
|
|
|
|
|
|
Current
|
5,958,687
|
|
5,270,762
|
|
6,725,495
|
|
5,784,419
|
Non-current
|
7,718
|
|
12,347
|
|
7,718
|
|
12,347
|
On
the trade accounts payable balance as of June 30, 2020, R$1,674,014 in the parent company
and R$1,675,566 in the consolidated (R$1,434,152 in the parent company and R$1,435,025 in
the consolidated as of December 31, 2019) corresponds to supply chain finance transactions in which there were no changes in the
payment terms and prices negotiated with the suppliers.
|
|
Parent company and Consolidated
|
|
|
06.30.20
|
|
12.31.19
|
Supply chain finance - Domestic suppliers
|
|
694,136
|
|
671,869
|
Supply chain finance - Foreign suppliers
|
|
300,609
|
|
182,126
|
|
|
994,745
|
|
853,995
|
|
|
|
|
|
(-) Adjustment to present value
|
|
(12,508)
|
|
(11,958)
|
|
|
982,237
|
|
842,037
|
The Company has partnerships
with several financial institutions that allow the suppliers to anticipate their receivables. The suppliers may choose whether
to participate and if so, with which institution. The anticipation allows the suppliers to better manage their cash flow needs.
This flexibility allows the Company to intensify its commercial relations with the network of suppliers by potentially leveraging
benefits such as preference for supply in case of restricted supply, better price conditions and/or more flexible payment terms,
among others, without changes in other commercial conditions. These operations are presented in the cash flow of operating activities.
On June 30, 2020, the discount
rates applied to the supply chain finance transactions agreed between our suppliers and the financial institutions in the domestic
market were set between 0.46% and 0.68% p.m. (0.38% to 0.67% p.m. on December 31, 2019).
On June 30, 2020, the discount
rates applied to the supply chain finance transactions agreed between our suppliers and the financial institutions in the external
market were set between 0.32% and 0.45% p.m. (0.32% to 0.46% p.m. on December 31, 2019).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
63
|
The Company is lessee in several
lease agreements for forest lands, offices, distribution centers, integrated producers, vehicles, among others. Some contracts
have a renewal option for an additional period at the end of the agreement, established by contractual amendments. Automatic renewals
or renewals for undetermined periods are not allowed.
The contract clauses mentioned,
with respect to renewal, readjustment and purchase option, are contracted according to market practices. In addition, there are
no clauses of contingent payments or restrictions on dividends distribution, payments of interest on shareholders’ equity
or obtaining debt.
|
18.1.
|
Right-of-use
assets
|
The right-of-use assets as set
forth below are part of the balances of property, plant and equipment and intangible assets (notes 13 and 14).
|
Parent company
|
|
Weighted average depreciation rate (p.a.)
|
|
12.31.19
|
|
Additions
|
|
Disposals
|
|
Transfers
|
|
06.30.20
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
20,499
|
|
-
|
|
(182)
|
|
20,751
|
|
41,068
|
Buildings
|
|
|
2,446,641
|
|
81,205
|
|
(1,387)
|
|
(2,487)
|
|
2,523,972
|
Machinery and equipment
|
|
|
114,571
|
|
1,073
|
|
(7,681)
|
|
-
|
|
107,963
|
Vehicles
|
|
|
112,917
|
|
16,625
|
|
(7,616)
|
|
-
|
|
121,926
|
Software
|
|
|
55,705
|
|
72,766
|
|
(35,624)
|
|
(18,264)
|
|
74,583
|
|
|
|
2,750,333
|
|
171,669
|
|
(52,490)
|
|
-
|
|
2,869,512
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
14.77%
|
|
(4,258)
|
|
(3,086)
|
|
37
|
|
(1,799)
|
|
(9,106)
|
Buildings
|
28.79%
|
|
(459,122)
|
|
(190,934)
|
|
723
|
|
(6,765)
|
|
(656,098)
|
Machinery and equipment
|
40.97%
|
|
(96,684)
|
|
(13,573)
|
|
7,024
|
|
-
|
|
(103,233)
|
Vehicles
|
28.75%
|
|
(18,550)
|
|
(17,886)
|
|
1,025
|
|
-
|
|
(35,411)
|
Software
|
45.21%
|
|
(44,815)
|
|
(16,577)
|
|
35,624
|
|
8,564
|
|
(17,204)
|
|
|
|
(623,429)
|
|
(242,056)
|
|
44,433
|
|
-
|
|
(821,052)
|
|
|
|
2,126,904
|
|
(70,387)
|
|
(8,057)
|
|
-
|
|
2,048,460
|
|
Consolidated
|
|
Weighted average depreciation rate (p.a.)
|
|
12.31.19
|
|
Additions
|
|
Disposals
|
|
Exchange rate variation
|
|
Transfers
|
|
06.30.20
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
22,790
|
|
1,167
|
|
(751)
|
|
617
|
|
20,751
|
|
44,574
|
Buildings
|
|
|
2,615,883
|
|
133,093
|
|
(22,443)
|
|
61,134
|
|
(2,487)
|
|
2,785,180
|
Machinery and equipment
|
|
|
115,173
|
|
1,073
|
|
(7,729)
|
|
213
|
|
-
|
|
108,730
|
Vehicles
|
|
|
207,443
|
|
19,501
|
|
(51,975)
|
|
31,480
|
|
-
|
|
206,449
|
Software
|
|
|
55,705
|
|
72,766
|
|
(35,625)
|
|
-
|
|
(18,264)
|
|
74,582
|
|
|
|
3,016,994
|
|
227,600
|
|
(118,523)
|
|
93,444
|
|
-
|
|
3,219,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
16.54%
|
|
(5,086)
|
|
(3,107)
|
|
605
|
|
(727)
|
|
(1,799)
|
|
(10,114)
|
Buildings
|
28.61%
|
|
(512,836)
|
|
(223,884)
|
|
21,780
|
|
(21,910)
|
|
(6,765)
|
|
(743,615)
|
Machinery and equipment
|
40.99%
|
|
(96,958)
|
|
(13,727)
|
|
7,056
|
|
(114)
|
|
-
|
|
(103,743)
|
Vehicles
|
28.77%
|
|
(57,357)
|
|
(35,725)
|
|
39,271
|
|
(15,594)
|
|
-
|
|
(69,405)
|
Software
|
45.21%
|
|
(44,815)
|
|
(16,577)
|
|
35,624
|
|
-
|
|
8,564
|
|
(17,204)
|
|
|
|
(717,052)
|
|
(293,020)
|
|
104,336
|
|
(38,345)
|
|
-
|
|
(944,081)
|
|
|
|
2,299,942
|
|
(65,420)
|
|
(14,187)
|
|
55,099
|
|
-
|
|
2,275,434
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
64
|
|
Parent
company
|
|
WAM
(1)
|
|
12.31.19
|
|
Additions
|
|
Payments
|
|
Interest
paid
|
|
Interest
accrued
|
|
Disposals
|
|
Transfers
|
|
06.30.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
6.6
|
|
18,707
|
|
83
|
|
(3,543)
|
|
(2,169)
|
|
2,169
|
|
(210)
|
|
17,501
|
|
32,538
|
Buildings
|
7.4
|
|
2,106,997
|
|
89,637
|
|
(170,175)
|
|
(41,931)
|
|
78,980
|
|
(693)
|
|
(17,501)
|
|
2,045,314
|
Machinery
and equipment
|
1.1
|
|
25,349
|
|
1,073
|
|
(16,111)
|
|
(6,694)
|
|
6,694
|
|
(733)
|
|
-
|
|
9,578
|
Vehicles
|
2.5
|
|
100,362
|
|
16,625
|
|
(15,806)
|
|
(4,972)
|
|
4,972
|
|
(6,915)
|
|
-
|
|
94,266
|
Software
|
2.0
|
|
1,137
|
|
72,766
|
|
(15,411)
|
|
(2,237)
|
|
2,237
|
|
-
|
|
-
|
|
58,492
|
|
|
|
2,252,552
|
|
180,184
|
|
(221,046)
|
|
(58,003)
|
|
95,052
|
|
(8,551)
|
|
-
|
|
2,240,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
313,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
244,450
|
Non-current
|
|
|
1,939,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,995,738
|
|
(1)
|
Weighted average maturity in years.
|
|
Consolidated
|
|
WAM
(1)
|
|
12.31.19
|
|
Additions
|
|
Payments
|
|
Interest
paid
|
|
Interest
accrued
|
|
Disposals
|
|
Transfers
|
|
Exchange
rate variation
|
|
06.30.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
5.0
|
|
20,355
|
|
1,250
|
|
(3,861)
|
|
(2,458)
|
|
2,458
|
|
(210)
|
|
17,501
|
|
(42)
|
|
34,993
|
Buildings
|
4.5
|
|
2,227,026
|
|
141,525
|
|
(201,487)
|
|
(47,890)
|
|
84,939
|
|
(693)
|
|
(17,501)
|
|
40,905
|
|
2,226,824
|
Machinery
and equipment
|
1.1
|
|
25,687
|
|
1,073
|
|
(16,267)
|
|
(6,704)
|
|
6,704
|
|
(747)
|
|
-
|
|
102
|
|
9,848
|
Vehicles
|
1.7
|
|
156,975
|
|
19,501
|
|
(31,238)
|
|
(7,318)
|
|
7,318
|
|
(13,388)
|
|
-
|
|
16,624
|
|
148,474
|
Software
|
2.0
|
|
1,137
|
|
72,766
|
|
(15,411)
|
|
(2,237)
|
|
2,237
|
|
-
|
|
-
|
|
-
|
|
58,492
|
|
|
|
2,431,180
|
|
236,115
|
|
(268,264)
|
|
(66,607)
|
|
103,656
|
|
(15,038)
|
|
-
|
|
57,589
|
|
2,478,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
376,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
317,435
|
Non-current
|
|
|
2,054,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,161,196
|
|
(1)
|
Weighted average maturity in years.
|
|
18.3.
|
Lease
liabilities maturity schedule
|
The minimum future payments
required for these finance leases are segregated as follows, and were recorded in current and non-current liabilities:
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
06.30.20
|
Current
|
244,450
|
|
317,435
|
Non-current
|
1,995,738
|
|
2,161,196
|
July to december 2021
|
670,047
|
|
714,004
|
2022
|
325,344
|
|
368,428
|
2023
|
266,158
|
|
284,173
|
2024
|
211,437
|
|
217,127
|
2025 onwards
|
522,752
|
|
577,464
|
|
2,240,188
|
|
2,478,631
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
65
|
The Company
uses nominal incremental rates to measure its lease liabilities. The nominal and real interest rates are presented below.
|
|
06.30.20
|
|
12.31.19
|
Contract Terms
|
|
Nominal rate% p.a.
|
|
Actual rate% p.a.
|
|
Nominal rate% p.a.
|
|
Actual rate% p.a.
|
|
|
|
|
|
|
|
|
|
1 year
|
|
5.69%
|
|
1.05%
|
|
8.46%
|
|
4.97%
|
2 years
|
|
6.64%
|
|
2.38%
|
|
9.49%
|
|
5.37%
|
3 years
|
|
6.81%
|
|
2.60%
|
|
10.60%
|
|
6.28%
|
4 years
|
|
-
|
|
-
|
|
11.43%
|
|
7.01%
|
5 years
|
|
-
|
|
-
|
|
11.84%
|
|
7.28%
|
6 years
|
|
-
|
|
-
|
|
12.13%
|
|
7.48%
|
8 years
|
|
-
|
|
-
|
|
12.43%
|
|
7.67%
|
9 years
|
|
-
|
|
-
|
|
12.51%
|
|
7.78%
|
10 years
|
|
-
|
|
-
|
|
12.61%
|
|
7.84%
|
11 years
|
|
-
|
|
-
|
|
12.68%
|
|
7.86%
|
13 years
|
|
-
|
|
-
|
|
12.81%
|
|
7.93%
|
14 years
|
|
-
|
|
-
|
|
12.86%
|
|
7.96%
|
15 years
|
|
-
|
|
-
|
|
12.90%
|
|
7.97%
|
18 years
|
|
-
|
|
-
|
|
13.01%
|
|
8.03%
|
20 years
|
|
13.26%
|
|
9.00%
|
|
13.12%
|
|
8.12%
|
The rates
presented above as of June 30, 2020 refer to the incremental rates used in contracts recognized in the first semester of 2020 and
the rates as of December 31, 2019 refer to the rates used in contracts recognized in 2019.
|
18.5.
|
Amounts
recognized in the statement of income
|
Below are the amounts directly
recognized in the statement of income related to items exempt of recognition: low-value assets, short-term leases and leases with
variable payments.
|
|
Parent Company
|
|
Consolidated
|
|
|
April to June 2020
|
|
January to June 2020
|
|
April to June 2020
|
|
January to June 2020
|
Variable payments not included in the lease liabilities
|
|
11,403
|
|
22,151
|
|
79,202
|
|
161,730
|
Expenses related to short-term assets
|
|
12,805
|
|
28,539
|
|
42,045
|
|
84,249
|
Expenses related to low-value assets
|
|
1,188
|
|
1,264
|
|
1,406
|
|
1,707
|
|
|
25,396
|
|
51,954
|
|
122,653
|
|
247,686
|
|
18.6.
|
Sale-and-leaseback transactions
|
During the six-month period
ended on June 30, 2020 three sale-and-leaseback transactions of grain warehouses were concluded. These warehouses are located in:
(i) Campo Erê – Santa Catarina, (ii) Pato Branco, and (iii) Medianeira, both in the state of Paraná; which were
analyzed according to the IFRS 16 premises and the right-of-use assets were recognized, as well as the lease liabilities of each
contract. These transactions contained in the addition movements of the Buildings class.
The rules for the stock options
and restricted shares plans granted to executives were disclosed in the financial statements for the year ended on December 31,
2019 (note 20). On April 27, 2020, the general shareholder’s meeting approved changes to the plans, increasing the limit
of grants from 0.5% to 2.5% of the common, registered, book-entry shares with no par value, representative of the Company’s
total capital stock.
The breakdown of the outstanding
granted stock options is set forth as follows:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
66
|
Date
|
|
Quantity
|
|
Grant (1)
|
|
Strike price (1)
|
Grant date
|
|
Beggining of exercise
|
|
End of the exercise
|
|
Options granted
|
|
Outstanding options
|
|
Fair value of the option
|
|
Granting date
|
|
Updated IPCA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04.26.16
|
|
04.30.17
|
|
04.30.21
|
|
8,724,733
|
|
1,325,000
|
|
9.21
|
|
56.00
|
|
66.73
|
05.31.16
|
|
05.31.17
|
|
05.31.21
|
|
3,351,220
|
|
1,156,990
|
|
10.97
|
|
46.68
|
|
55.20
|
|
|
|
|
|
|
12,075,953
|
|
2,481,990
|
|
|
|
|
|
|
|
(1)
|
Amounts expressed in Brazilian Reais.
|
The breakdown of the outstanding
granted restricted shares is set forth as follows:
Date
|
|
Quantity
|
|
Grant (1)
|
Grant
|
|
Vesting date
|
|
Shares granted
|
|
Outstanding shares
|
|
Fair value of the shares
|
|
|
|
|
|
|
|
|
|
10.01.18
|
|
10.01.21
|
|
2,311,394
|
|
1,293,330
|
|
21.44
|
07.01.19
|
|
07.01.22
|
|
1,815,649
|
|
1,306,455
|
|
30.61
|
09.16.19
|
|
10.01.22
|
|
68,605
|
|
68,605
|
|
30.61
|
04.01.20
|
|
04.01.22
|
|
359,293
|
|
359,293
|
|
18.40
|
06.01.20
|
|
06.01.23
|
|
3,571,736
|
|
3,571,736
|
|
21.28
|
|
|
|
|
8,126,677
|
|
6,599,419
|
|
|
|
(1)
|
Amounts expressed in Brazilian Reais.
|
The rollforward of the granted
options and shares for the six-month period ended on June 30, 2020, is presented as follows:
|
|
Consolidated
|
|
|
|
Outstanding options/shares as of December 31, 2019
|
|
4,722,734
|
Granted
|
|
|
Restricted shares - June 2020
|
|
1,315,566
|
Restricted shares - April 2020
|
|
359,293
|
Exercised / Delivered:
|
|
|
Restricted Shares – grant of June, 2019
|
|
(140,945)
|
Restricted Shares – grant of June, 2018
|
|
(97,875)
|
Forfeiture:
|
|
|
Restricted shares - Grant of 2019
|
|
(83,824)
|
Restricted shares - Grant of 2018
|
|
(95,128)
|
Stock options - Grant of 2016
|
|
(11,510)
|
Outstanding options/shares as of June 30, 2020
|
|
5,968,311
|
The weighted average exercise
price of the outstanding options conditioned to services is R$60.98 (sixty Brazilian Reais and ninety-eight cents) (R$60.96 as
of December 31, 2019), and the weighted average remaining vesting term is 11 months (17 months as of December 31, 2019).
The
Company has registered as capital reserve, under shareholders’ equity, the fair value of share-based compensation
plans in the amount of R$260,825 (R$255,445 as of December 31, 2019). In the statement of
income for the six-month period ended on June 30, 2020 the amount recognized as expense was R$5,380 (R$11,691
in the same period of the previous year), and during the three-month period ended
on June 30, 2020 the amount recognized as expense was R$1,209 (R$1,351 in the same period
of the previous year).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
67
|
|
20.
|
EMPLOYEES BENEFITS PLANS
|
The Company offers pension and
other post-employment plans to the employees. The characteristics of such benefits were disclosed in the annual financial statements
for the year ended on December 31, 2019 (note 21) and have not been changed during the following periods. The actuarial liabilities
are presented below:
|
Parent company
|
|
Consolidated
|
|
Liabilities
|
|
Liabilities
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Medical assistance
|
194,067
|
|
187,274
|
|
194,067
|
|
187,274
|
F.G.T.S. Penalty (1)
|
260,840
|
|
247,485
|
|
260,840
|
|
247,485
|
Award for length of service
|
109,292
|
|
103,284
|
|
109,292
|
|
103,284
|
Other
|
59,530
|
|
56,744
|
|
187,786
|
|
151,431
|
|
623,729
|
|
594,787
|
|
751,985
|
|
689,474
|
|
|
|
|
|
|
|
|
Current
|
87,996
|
|
87,996
|
|
97,688
|
|
95,919
|
Non-current
|
535,733
|
|
506,791
|
|
654,297
|
|
593,555
|
|
(1)
|
FGTS –
Government Severance Indemnity Fund for Employees
|
The Company estimated costs
for the year of 2020 according to an appraisal report prepared in 2019 by an actuarial expert and recorded in the statement of
income for the six-month period ended on June 30, 2020 against other comprehensive income a gain of R$13,035 in the parent company
and R$12,964 in consolidated (R$5,311 in the parent company and R$4,956 in the same period of the previous year) and for the three-month
period ended on June 30, 2020 a gain of R$6,647 in the parent company and R$6,623 in consolidated (R$4,393 in the parent company
and R$4,373 in consolidated in the same period of the previous year).
|
21.
|
PROVISION FOR TAX, CIVIL, LABOR AND OTHER RISKS
|
The Company and its subsidiaries
are involved in certain legal matters arising in the normal course of business, which include civil, tax, social security, labor,
commercial and other processes.
Company’s Management believes
that, based on the elements existing at the base date of the interim financial information, the provision for tax, civil, labor,
commercial and other risks, is sufficient to cover eventual losses with administrative and legal proceedings, as set forth below.
|
21.1.
|
Contingencies with probable losses
|
The rollforward of the provisions
for tax, labor, civil, commercial and other risks classified as with probable loss, and contingent liabilities is presented below:
|
Parent company
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
Tax
|
|
Labor
|
|
Civil, commercial and other
|
Contingent liabilities (Business combination)
|
Total
|
Beginning balance
|
583,316
|
|
600,510
|
|
306,476
|
|
300,561
|
|
1,790,863
|
Additions
|
54,362
|
|
160,277
|
|
19,112
|
|
-
|
|
233,751
|
Reversals
|
(6,641)
|
|
(61,375)
|
|
(17,237)
|
|
(1,388)
|
|
(86,641)
|
Payments
|
(37,809)
|
|
(134,174)
|
|
(14,895)
|
|
-
|
|
(186,878)
|
Interest
|
30,115
|
|
43,707
|
|
19,465
|
|
-
|
|
93,287
|
Ending balance
|
623,343
|
|
608,945
|
|
312,921
|
|
299,173
|
|
1,844,382
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
1,135,183
|
Non-current
|
|
|
|
|
|
|
|
|
709,199
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
68
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
06.30.20
|
|
Tax
|
Labor
|
Civil, commercial and other
|
Contingent liabilities (Business combination)
|
Total
|
Beginning balance
|
583,464
|
|
603,074
|
|
307,177
|
|
300,654
|
|
1,794,369
|
Additions
|
54,363
|
|
160,535
|
|
19,112
|
|
-
|
|
234,010
|
Reversals
|
(6,641)
|
|
(61,375)
|
|
(17,237)
|
|
(1,388)
|
|
(86,641)
|
Payments
|
(37,809)
|
|
(134,174)
|
|
(14,895)
|
|
-
|
|
(186,878)
|
Interest
|
30,115
|
|
43,707
|
|
19,465
|
|
-
|
|
93,287
|
Exchange rate variation
|
23
|
|
474
|
|
126
|
|
14
|
|
637
|
Ending balance
|
623,515
|
|
612,241
|
|
313,748
|
|
299,280
|
|
1,848,784
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
1,139,238
|
Non-current
|
|
|
|
|
|
|
|
|
709,546
|
|
21.2.
|
Contingencies with possible losses
|
The Company is involved in contingencies
for which losses have been assessed as possible by Management with support from legal advisors, and for which no provision has
been recorded. On June 30, 2020, the total amount of contingencies classified as possible was R$14,304,807 (R$13,299,190 as of
December 31, 2019), of which R$299,280 (R$300,654 as of December 31, 2019) were recorded at fair value as a result of the business
combination with Sadia, presented in the table above.
On June 30, 2020, the subscribed
and paid capital of the Company was R$12,553,418, which is composed of 812,473,246 common book-entry shares with no par value.
The value of the capital stock is net of the public offering expenses of R$92,947, made on July 22, 2009.
The Company is authorized to
increase the capital stock, irrespective of amendment to the bylaws, up to the limit of 1,000,000,000 common book-entry shares
with no par value.
|
22.1.1.
|
Breakdown of capital stock by nature
|
Parent company and Consolidated
|
|
06.30.20
|
|
12.31.19
|
Common shares
|
812,473,246
|
|
812,473,246
|
Treasury shares
|
(5,310,626)
|
|
(713,446)
|
Outstanding shares
|
807,162,620
|
|
811,759,800
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
69
|
|
22.1.2.
|
Rollforward of outstanding shares
|
|
|
Parent company
|
|
|
Quantity of outstanding of shares
|
|
|
06.30.20
|
|
12.31.19
|
Shares at the beginning of the year
|
|
811,759,800
|
|
811,416,022
|
Purchase of treasury shares
|
|
(4,836,000)
|
|
-
|
Delivery of restricted shares
|
|
238,820
|
|
343,778
|
Shares at the end of the year
|
|
807,162,620
|
|
811,759,800
|
The Company has 5,310,626 shares
held in treasury, with an average cost of R$26.00 (twenty-six Brazilian Reais) per share, and market value corresponding to R$112,904.
|
|
Parent company
|
|
|
Quantity of outstanding of shares
|
|
|
06.30.20
|
|
12.31.19
|
Shares at the beggining of the exercise
|
|
713,446
|
|
1,057,224
|
Purchase of treasury shares
|
|
4,836,000
|
|
-
|
Delivery of restricted shares
|
|
(238,820)
|
|
(343,778)
|
Shares at the end of the exercise
|
|
5,310,626
|
|
713,446
|
The program of repurchase of
own shares, which was approved by the Board of Directors on March 26, 2020, was concluded on May 22, 2020. The Company purchased
4,836,000 common shares, representing 0,60% of its capital stock, at the cost of R$106,070, with the purpose to maintain in treasury
for eventual disposal, cancellation, as well as to comply with obligations and commitments made under the Stock Option Plan
and the Restricted Stocks Plan.
|
23.
|
EARNINGS (LOSS) PER SHARE
|
The basic earnings (losses)
per share are calculated by dividing the earnings (losses) attributable to the owners of ordinary shares, by the weighted average
quantity of available ordinary shares during the period.
The diluted earnings (losses)
per share are calculated by dividing the earnings (losses) attributable to the owners of ordinary shares by the weighted average
quantity of available ordinary shares during the period summed to the weighted average quantity of ordinary shares that would be
available on the conversion of all potential dilutive ordinary shares (stock options and restricted shares).
|
Continued
operations
|
|
Discontinued
operations
|
|
Continued
and discontinued operations
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2019
|
|
January
to June 2019
|
Basic
numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings (loss) for the exercise attributable to controlling shareholders
|
303,870
|
|
257,949
|
|
187,894
|
|
75,831
|
|
134,931
|
|
(753,941)
|
|
322,825
|
|
(678,110)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares
|
812,473,246
|
|
812,473,246
|
|
812,473,246
|
|
812,473,246
|
|
812,473,246
|
|
812,473,246
|
|
812,473,246
|
|
812,473,246
|
Weighted
average number of outstanding shares - basic
(except treasury shares)
|
809,612,517
|
|
810,672,698
|
|
811,440,470
|
|
811,428,248
|
|
811,440,470
|
|
811,428,248
|
|
811,440,470
|
|
811,428,248
|
Net
earnings (loss) per share basic - R$
|
0.38
|
|
0.32
|
|
0.23
|
|
0.09
|
|
0.17
|
|
(0.93)
|
|
0.40
|
|
(0.84)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings (loss) for the exercise attributable to controlling shareholders
|
303,870
|
|
257,949
|
|
187,894
|
|
75,831
|
|
134,931
|
|
(753,941)
|
|
322,825
|
|
(678,110)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of outstanding shares - basic
(except treasury shares)
|
809,612,517
|
|
810,672,698
|
|
811,440,470
|
|
811,428,248
|
|
811,440,470
|
|
811,428,248
|
|
811,440,470
|
|
811,428,248
|
Number
of potential shares
|
262,692
|
|
262,692
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Weighted
average number of outstanding shares - diluted
|
809,875,209
|
|
810,935,390
|
|
811,440,470
|
|
811,428,248
|
|
811,440,470
|
|
811,428,248
|
|
811,440,470
|
|
811,428,248
|
Net
earnings (loss) per share diluted - R$
|
0.38
|
|
0.32
|
|
0.23
|
|
0.09
|
|
0.17
|
|
(0.93)
|
|
0.40
|
|
(0.84)
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
70
|
|
24.
|
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT
|
In the ordinary course of business,
the Company is exposed to credit, liquidity and market risks, which are actively managed in compliance with the Financial Risk
Management Policy (“Risk Policy”) and internal guidelines and strategic documents subject to such policy, executing
the formal designation of its hedge accounting relations in accordance with CPC 48 / IFRS 09, as disclosed in the financial statements
for the year ended on December 31, 2019.
|
24.2.
|
Credit risk management
|
The Company is exposed to the
credit risk related to the financial assets held: trade and non-trade accounts receivable, marketable securities, derivative instruments
and cash and equivalents.
On June 30, 2020, the Company
held financial investments over R$100,000 at the following financial institutions: Banco Bradesco, Banco BIC, Banco BNP Paribas,
Banco do Brasil, Banco BTG Pactual, Banco Itaú, Banco Safra, Banco Santander, Banco Votorantim, Caixa Econômica Federal,
Citibank, HSBC, J.P. Morgan Chase Bank, National Commercial Bank, T.Garanti Bankasi A.Ş. and Vakiflar Bankasi.
The Company also held derivative
contracts with the following financial institutions: Banco Bradesco, Banco Itaú, Banco Safra, Banco Santander, Banco Votorantim,
Bank of America Merrill Lynch, Banco BNP Paribas, Citibank, Deutsche Bank, ING Bank, J.P. Morgan Chase Bank, Morgan Stanley and
Rabobank.
|
24.3.
|
Capital management and liquidity risk
|
On June 30, 2020, the long-term
consolidated gross debt represented 80.1% (82.5% as of December 31, 2019) of the total gross indebtedness, which has an average
term higher than four years.
The Company monitors the gross
debt and net debt as set forth below:
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
Current
|
|
Non-current
|
|
Total
|
|
Total
|
Foreign currency debt
|
(940,938)
|
|
(14,699,526)
|
|
(15,640,464)
|
|
(11,006,524)
|
Local currency debt
|
(3,131,012)
|
|
(6,092,075)
|
|
(9,223,087)
|
|
(7,613,755)
|
Derivative financial liabilities
|
(1,100,649)
|
|
(43,905)
|
|
(1,144,554)
|
|
(153,612)
|
Gross debt
|
(5,172,599)
|
|
(20,835,506)
|
|
(26,008,105)
|
|
(18,773,891)
|
|
|
|
|
|
|
|
|
Marketable securities and cash and cash equivalents
|
10,008,458
|
|
415,456
|
|
10,423,914
|
|
4,963,319
|
Derivative financial assets
|
244,362
|
|
4,881
|
|
249,243
|
|
245,315
|
Restricted cash
|
1
|
|
24,178
|
|
24,179
|
|
296,294
|
Net debt
|
5,080,222
|
|
(20,390,991)
|
|
(15,310,769)
|
|
(13,268,963)
|
The table below summarizes the
significant commitments and contractual obligations that may impact the Company’s liquidity:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
71
|
|
Parent
company
|
|
06.30.20
|
|
Book
value
|
|
Contractual
cash flow
|
|
Up
to 12 months
|
|
July
to december 2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
onwards
|
Non
derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
and financing
|
21,665,812
|
|
26,231,999
|
|
4,579,708
|
|
2,263,004
|
|
4,203,614
|
|
3,859,809
|
|
3,662,471
|
|
7,663,393
|
Trade
accounts payable
|
5,966,405
|
|
6,026,425
|
|
6,018,697
|
|
2,011
|
|
2,913
|
|
2,697
|
|
107
|
|
-
|
Supply
chain finance
|
982,237
|
|
994,745
|
|
994,745
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Lease
payables
|
2,240,188
|
|
2,758,299
|
|
261,195
|
|
740,060
|
|
383,954
|
|
335,622
|
|
284,883
|
|
752,585
|
Derivative
financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
instruments designated as cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate derivatives
|
35,561
|
|
35,561
|
|
-
|
|
35,561
|
|
-
|
|
-
|
|
-
|
|
-
|
Currency
derivatives
|
1,008,908
|
|
1,008,908
|
|
1,004,188
|
|
4,720
|
|
-
|
|
-
|
|
-
|
|
-
|
Commodities
derivatives
|
28,799
|
|
28,799
|
|
25,174
|
|
3,625
|
|
-
|
|
-
|
|
-
|
|
-
|
Financial
instruments not designated as cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
derivatives
|
68,812
|
|
68,812
|
|
68,812
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Consolidated
|
|
06.30.20
|
|
Book
value
|
|
Contractual
cash flow
|
|
Up
to 12 months
|
|
July
to december 2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
onwards
|
Non
derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
and financing
|
24,863,551
|
|
30,288,641
|
|
4,855,431
|
|
2,450,753
|
|
4,574,209
|
|
3,987,075
|
|
3,781,574
|
|
10,639,599
|
Trade
accounts payable
|
6,733,213
|
|
6,793,254
|
|
6,785,526
|
|
2,011
|
|
2,913
|
|
2,697
|
|
107
|
|
-
|
Supply
chain finance
|
982,237
|
|
994,745
|
|
994,745
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Lease
payables
|
2,478,631
|
|
3,044,828
|
|
339,179
|
|
788,610
|
|
434,799
|
|
358,339
|
|
292,549
|
|
831,352
|
Derivative
financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
instruments designated as cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate derivatives
|
35,561
|
|
35,561
|
|
-
|
|
35,561
|
|
-
|
|
-
|
|
-
|
|
-
|
Currency
derivatives
|
1,008,908
|
|
1,008,908
|
|
1,004,188
|
|
4,720
|
|
-
|
|
-
|
|
-
|
|
-
|
Commodities
derivatives
|
28,799
|
|
28,799
|
|
25,174
|
|
3,625
|
|
-
|
|
-
|
|
-
|
|
-
|
Financial
instruments not designated as cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
derivatives
|
71,286
|
|
71,286
|
|
71,286
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
The Company does not expect
that the cash outflows to fulfill the obligations shown above will be significantly anticipated, by factors unrelated to its best
interests, or substantially modified outside the normal course of business.
|
24.4.
|
Market risk management
|
|
24.4.1.
|
Interest rate risk
|
The indebtedness is essentially
linked to fixed coupons (R$, USD, EUR and TRY), Interbank Deposit Certificate (“CDI”), Broad Consumer Price Index (“IPCA”)
and London Interbank Offered Rate (“LIBOR”). In situations of adverse market changes that result in an increase in
these rates, the cost of floating-rate debt rises and on the other hand, the cost of fixed-rate debt decreases in relative terms.
Regarding the marketable securities,
the Company holds, mainly, instruments indexed by the CDI for investments in Brazil and fixed coupon in USD for investments in
the foreign market.
The Company’s exposure
to interest rates can be assessed in notes 5 and 15.
The derivative financial instruments
hired to hedge the exposure to interest rates as of June 30, 2020 were designated as hedge accounting and are shown in the table
below:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
72
|
06.30.20
|
Cash
flow hedges - Derivative instruments
|
|
Maturity
|
|
Hedged
Object
|
|
Asset
|
|
Liability
|
|
Notional
|
|
Fair
value (R$)
|
Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate swap
|
|
3rd
Qtr. 2021
|
|
Debt
|
|
118,00%
CDI
|
|
5.60%
p.a.
|
|
810,000
|
BRL
|
|
(28,212)
|
Interest
rate swap
|
|
4th
Qtr. 2021
|
|
Debt
|
|
118,00%
CDI
|
|
5.72%
p.a.
|
|
180,000
|
BRL
|
|
(7,349)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35,561)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
instruments not designated
|
|
Maturity
|
|
Hedged
Object
|
|
Asset
|
|
Liability
|
|
Notional
|
|
Fair
value (R$)
|
Parent
company and Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate swap
|
|
2th
Qtr. 2021
|
|
Debt
|
|
E.R.
+ 2.80% p.a.
|
|
CDI
+ 2.27% p.a.
|
|
49,900
|
USD
|
|
(380)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(380)
|
|
24.4.2.
|
Foreign exchange risk
|
This risk is the one that may
cause unexpected losses to the Company resulting from volatility of the FX rates, reducing its assets and revenues or increasing
its liabilities and costs. The Company’s exposure is managed in three dimensions: statement of financial position exposure,
operating income exposure and investments exposure.
|
i.
|
Statement of financial position exposure
|
Assets and liabilities denominated
in foreign currency for which the exchange variations are recognized in the Financial Results are as follows, summarized in Brazilian
Reais:
|
|
Consolidated
|
|
|
06.30.20
|
|
12.31.19 (1)
|
|
|
|
|
|
Cash and cash equivalents
|
|
4,458,051
|
|
2,591,746
|
Trade accounts receivable
|
|
6,473,734
|
|
4,892,708
|
Trade accounts payable
|
|
(900,875)
|
|
(601,007)
|
Loans and financing
|
|
(14,562,591)
|
|
(8,854,826)
|
Other assets and liabilities, net
|
|
(234,839)
|
|
(162,341)
|
Exposure of assets and liabilities in foreign currencies
|
|
(4,766,520)
|
|
(2,133,720)
|
Derivative financial instruments (hedge)
|
|
4,489,296
|
|
1,734,517
|
|
|
|
|
|
Exposure in result, net
|
|
(277,224)
|
|
(399,203)
|
|
(1)
|
Restated for better presentation of the amount previously classified
in Investments, which was relocated to the corresponding assets and liabilities.
|
The net P&L exposure is
mainly composed of the following currencies:
Net P&L Exposure
|
|
06.30.20
|
|
12.31.19
|
Argentinian Peso (ARS)
|
|
(12,499)
|
|
(13,236)
|
Euros (EUR)
|
|
(60,808)
|
|
23,624
|
Pound Sterling (GBP)
|
|
8,980
|
|
6,949
|
Yen (JPY)
|
|
(34,361)
|
|
(17,285)
|
Rubles (RUB)
|
|
23,907
|
|
2,780
|
Turkish Liras (TRY)
|
|
(16,571)
|
|
(418,576)
|
U.S. Dollars (USD)
|
|
(185,872)
|
|
16,541
|
Total
|
|
(277,224)
|
|
(399,203)
|
The derivative financial instruments
hired to hedge the foreign currency statement of financial position exposure on June 30, 2020 are not designated as hedge accounting
and are set forth below:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
73
|
06.30.20
|
Derivative
instruments not designated
|
|
Asset
|
|
Liability
|
|
Maturity
|
|
Notional
|
|
Exercise
rate
|
|
Fair
value (R$)
|
Parent
company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward
|
|
EUR
|
|
BRL
|
|
3nd
Qtr. 2020
|
|
EUR
|
265,000
|
|
6.1570
|
|
(6,379)
|
Non-deliverable
forward
|
|
USD
|
|
BRL
|
|
3nd
Qtr. 2020
|
|
USD
|
340,000
|
|
5.4778
|
|
(9,569)
|
Non-deliverable
forward
|
|
USD
|
|
BRL
|
|
2nd
Qtr. 2021
|
|
USD
|
50,000
|
|
5.2800
|
|
9,772
|
Non-deliverable
forward
|
|
BRL
|
|
USD
|
|
3th
Qtr. 2020
|
|
USD
|
9,000
|
|
4.3210
|
|
(10,064)
|
Non-deliverable
forward
|
|
BRL
|
|
USD
|
|
4th
Qtr. 2020
|
|
USD
|
6,000
|
|
4.3314
|
|
(6,677)
|
Collar
|
|
BRL
|
|
USD
|
|
4th
Qtr. 2020
|
|
USD
|
31,000
|
|
4.2996
|
|
(35,672)
|
Futures
- B3
|
|
USD
|
|
BRL
|
|
3nd
Qtr. 2020
|
|
USD
|
128,250
|
|
5.4400
|
|
309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(58,280)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward
|
|
EUR
|
|
JPY
|
|
3nd
Qtr. 2020
|
|
EUR
|
20,773
|
|
120.3499
|
|
1,119
|
Non-deliverable
forward
|
|
EUR
|
|
USD
|
|
3nd
Qtr. 2020
|
|
EUR
|
55,000
|
|
1.1237
|
|
535
|
Non-deliverable
forward
|
|
EUR
|
|
RUB
|
|
3nd
Qtr. 2020
|
|
EUR
|
18,887
|
|
79.4177
|
|
2,578
|
Collar
|
|
TRY
|
|
USD
|
|
3nd
Qtr. 2020
|
|
USD
|
50,000
|
|
7.1875
|
|
(101)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
(54,149)
|
|
ii.
|
Operating income exposure
|
The derivative and non-derivative
financial instruments designated as cash flow hedges for foreing exchange operating income exposure on June 30, 2020 are set forth
below:
06.30.20
|
Cash
flow hedge - Derivative instruments
|
|
Hedged
object
|
|
Asset
|
|
Liability
|
|
Maturity
|
|
Notional
|
|
Designation
rate
|
|
Fair
value
|
Parent
company and consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward
|
|
USD
Exports
|
|
BRL
|
|
USD
|
|
3rd
Qtr. 2020
|
|
USD
|
66,000
|
|
5.0223
|
|
(27,975)
|
Non-deliverable
forward
|
|
USD
Exports
|
|
BRL
|
|
USD
|
|
4th
Qtr. 2020
|
|
USD
|
9,000
|
|
4.1090
|
|
(12,012)
|
Collar
|
|
USD
Exports
|
|
BRL
|
|
USD
|
|
3nd
Qtr. 2020
|
|
USD
|
531,000
|
|
4.9460
|
|
(297,160)
|
Collar
|
|
USD
Exports
|
|
BRL
|
|
USD
|
|
4rd
Qtr. 2020
|
|
USD
|
254,000
|
|
4.5206
|
|
(242,225)
|
Collar
|
|
USD
Exports
|
|
BRL
|
|
USD
|
|
1th
Qtr. 2021
|
|
USD
|
172,000
|
|
4.9970
|
|
(95,138)
|
Collar
|
|
USD
Exports
|
|
BRL
|
|
USD
|
|
2st
Qtr. 2021
|
|
USD
|
65,000
|
|
5.6098
|
|
5,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(669,271)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
Cash
flow hedge - Non-derivative instruments
|
|
Hedged
object
|
|
Asset
|
|
Liability
|
|
Maturity
|
|
Notional
|
|
Designation
rate
|
|
Fair
value (1)
|
Parent
company and consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond
BRF SA BRFSBZ5 (2)
|
|
USD
Exports
|
|
-
|
|
USD
|
|
2nd
Qtr. 2022
|
|
USD
|
109,312
|
|
2.0213
|
|
(436,066)
|
Bond
BRF SA BRFSBZ3
|
|
USD
Exports
|
|
-
|
|
USD
|
|
2nd
Qtr. 2023
|
|
USD
|
150,000
|
|
2.0387
|
|
(515,595)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(951,661)
|
|
(1)
|
Corresponds to the effective portion of the hedge result accumulated
in Other Comprehensive Income.
|
|
(2)
|
For this instrument, the initial designation was of USD150,000, however
there were repurchases with corresponding revocation of the designation in the amounts of USD31,338 at the rate of 3.2408 and USD9,350
at the rate of 4.1827. The accumulated exchange rate variation of the revoked portions is fixed and reserved in Other Comprehensive
Income until the recognition of the hedge object in the second quarter of 2022.
|
|
iii.
|
Investments exposure
|
The non-derivative financial
instruments designated as net investment hedge instruments on June 30, 2020 are set forth below:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
74
|
06.30.20
|
Net
investment hedge -
Non-derivative instruments
|
|
Protection
(Investment)
|
|
Asset
|
|
Liability
|
|
Maturity
|
|
Notional
|
|
Rate
|
|
Fair
value (1)
|
Parent
company and consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond
- BRF SA BRFSBZ4
|
|
Federal
Foods LLC
|
|
-
|
|
USD
|
|
3rd
Qtr. 2026
|
|
USD
|
75,673
|
|
3.7649
|
|
(130,129)
|
Bond
- BRF SA BRFSBZ4
|
|
BRF
Al Yasra Food
|
|
-
|
|
USD
|
|
3rd
Qtr. 2026
|
|
USD
|
108,757
|
|
3.7649
|
|
(167,003)
|
Bond
- BRF SA BRFSBZ4
|
|
Al
Khan Foodstuff LLC
|
|
-
|
|
USD
|
|
3rd
Qtr. 2026
|
|
USD
|
65,570
|
|
3.7649
|
|
(111,797)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(408,929)
|
|
(1)
|
Corresponds to the effective portion of the hedge result accumulated
in Other Comprehensive Income.
|
|
24.4.3.
|
Commodities price risk
|
The financial instruments designated
as cash flow hedges and fair value hedges for the commodities price exposure on June 30, 2020 are set forth below:
06.30.20
|
Cash
flow hedge - Derivative instruments
|
|
Hedged
object
|
|
Index
|
|
Maturity
|
|
Quantity
|
|
Exercise
rate (USD/Ton)
|
|
Fair
value
|
Parent
company and consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward - buy
|
|
Soybean
meal purchase - floating price
|
|
Soybean
meal - CBOT
|
|
3nd
Qtr. 2020
|
|
54,985
|
ton
|
|
123.25
|
|
(7,814)
|
Non-deliverable
forward - buy
|
|
Soybean
meal purchase - floating price
|
|
Soybean
meal - CBOT
|
|
4rd
Qtr. 2020
|
|
19,997
|
ton
|
|
118.46
|
|
(578)
|
Non-deliverable
forward - buy
|
|
Soybean
meal purchase - floating price
|
|
Soybean
meal - CBOT
|
|
1th
Qtr. 2021
|
|
34,993
|
ton
|
|
117.08
|
|
(442)
|
Non-deliverable
forward - buy
|
|
Soybean
meal purchase - floating price
|
|
Soybean
meal - CBOT
|
|
2st
Qtr. 2021
|
|
59,999
|
ton
|
|
115.31
|
|
572
|
Non-deliverable
forward - buy
|
|
Soybean
purchase - floating price
|
|
Soybean
- CBOT
|
|
3nd
Qtr. 2020
|
|
5,001
|
ton
|
|
334.67
|
|
(323)
|
Collar
- buy
|
|
Soybean
purchase - floating price
|
|
Soybean
- CBOT
|
|
3nd
Qtr. 2020
|
|
4,001
|
ton
|
|
331.06
|
|
(222)
|
Non-deliverable
forward - buy
|
|
Corn
purchase - floating price
|
|
Corn
- CBOT
|
|
4nd
Qtr. 2020
|
|
39,999
|
ton
|
|
131.55
|
|
1,406
|
Non-deliverable
forward - buy
|
|
Corn
purchase - floating price
|
|
Corn
- CBOT
|
|
1nd
Qtr. 2021
|
|
59,999
|
ton
|
|
136.96
|
|
1,722
|
Non-deliverable
forward - buy
|
|
Soybean
oil purchase - floating price
|
|
Soybean
oil - CBOT
|
|
3rd
Qtr. 2020
|
|
21,697
|
ton
|
|
629.39
|
|
(624)
|
Non-deliverable
forward - buy
|
|
Soybean
oil purchase - floating price
|
|
Soybean
oil - CBOT
|
|
4rd
Qtr. 2020
|
|
20,495
|
ton
|
|
616.65
|
|
2,249
|
Non-deliverable
forward - buy
|
|
Soybean
oil purchase - floating price
|
|
Soybean
oil - CBOT
|
|
1st
Qtr. 2021
|
|
10,297
|
ton
|
|
626.18
|
|
938
|
Non-deliverable
forward - buy
|
|
Soybean
oil purchase - floating price
|
|
Soybean
oil - CBOT
|
|
2st
Qtr. 2021
|
|
5,999
|
ton
|
|
645.92
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,122)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06.30.20
|
Fair
value hedge - Derivative instruments
|
|
Hedged
object
|
|
Index
|
|
Maturity
|
|
Quantity
|
|
Exercise
rate (USD/Ton)
|
|
Fair
value
|
Parent
company and consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward - sell
|
|
Soybean
purchase - fixed price
|
|
Soybean
- CBOT
|
|
3rd
Qtr. 2020
|
|
30,488
|
ton
|
|
339.75
|
|
2,918
|
Non-deliverable
forward - sell
|
|
Soybean
purchase - fixed price
|
|
Soybean
- CBOT
|
|
4th
Qtr. 2020
|
|
39,488
|
ton
|
|
340.82
|
|
3,596
|
Non-deliverable
forward - sell
|
|
Soybean
purchase - fixed price
|
|
Soybean
- CBOT
|
|
1st
Qtr. 2021
|
|
5,998
|
ton
|
|
317.10
|
|
(189)
|
Non-deliverable
forward - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- CBOT
|
|
3rd
Qtr. 2020
|
|
298,898
|
ton
|
|
157.20
|
|
37,237
|
Non-deliverable
forward - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- CBOT
|
|
4th
Qtr. 2020
|
|
549,034
|
ton
|
|
152.20
|
|
42,680
|
Non-deliverable
forward - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- CBOT
|
|
1st
Qtr. 2021
|
|
299,131
|
ton
|
|
153.96
|
|
19,176
|
Non-deliverable
forward - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- CBOT
|
|
2nd
Qtr. 2021
|
|
584,548
|
ton
|
|
147.62
|
|
4,158
|
Non-deliverable
forward - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- CBOT
|
|
3rd
Qtr. 2021
|
|
209,303
|
ton
|
|
141.70
|
|
(3,156)
|
Non-deliverable
forward - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- CBOT
|
|
4rd
Qtr. 2021
|
|
33,391
|
ton
|
|
145.56
|
|
(233)
|
Corn
future - sell
|
|
Corn
purchase - fixed price
|
|
Corn
- B3
|
|
3rd
Qtr. 2020
|
|
32,319
|
ton
|
|
710.75
|
|
(539)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,648
|
06.30.20
|
Fair
value hedge -
Derivative instruments
|
|
Protection
object
|
|
Assets
|
|
Liabilities
|
Maturity
|
|
Notional
|
|
Exercise
rate
|
|
Fair
value
|
Parent
company and consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward
|
|
Cost
in USD
|
|
BRL
|
|
USD
|
3rd
Qtr. 2020
|
|
USD
|
57,352
|
|
4.2031
|
|
(70,947)
|
Non-deliverable
forward
|
|
Cost
in USD
|
|
BRL
|
|
USD
|
4th
Qtr. 2020
|
|
USD
|
97,022
|
|
4.4466
|
|
(97,261)
|
Non-deliverable
forward
|
|
Cost
in USD
|
|
BRL
|
|
USD
|
1st
Qtr. 2021
|
|
USD
|
47,949
|
|
4.5868
|
|
(41,737)
|
Non-deliverable
forward
|
|
Cost
in USD
|
|
BRL
|
|
USD
|
2nd
Qtr. 2021
|
|
USD
|
86,290
|
|
5.1581
|
|
(28,458)
|
Non-deliverable
forward
|
|
Cost
in USD
|
|
BRL
|
|
USD
|
3rd
Qtr. 2021
|
|
USD
|
28,601
|
|
5.5164
|
|
(116)
|
Non-deliverable
forward
|
|
Cost
in USD
|
|
BRL
|
|
USD
|
4rd
Qtr. 2021
|
|
USD
|
5,918
|
|
5.5659
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(238,476)
|
|
24.5.
|
Effects of hedge instruments on financial information
|
The effects of financial instruments
for hedging exchange rate, commodities price and interest rates in the income for the period, in other comprehensive income and
in the financial position are set forth below:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
75
|
Income
for the period
|
|
|
|
|
|
|
|
|
|
Consolidated
|
April
to June 2020
|
|
Reference
|
|
Exposure
|
|
Hedge
accounting
|
|
Foreign
Exchange
|
|
Commodities
|
|
Interest
Rate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
9,798,045
|
|
-
|
|
-
|
|
9,798,045
|
Derivatives
result
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(694,119)
|
|
-
|
|
-
|
|
(694,119)
|
Net
Revenue
|
|
26
|
|
|
|
|
|
9,103,926
|
|
-
|
|
-
|
|
9,103,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Goods Sold
|
|
|
|
|
|
|
|
-
|
|
(7,085,743)
|
|
-
|
|
(7,085,743)
|
Derivatives
result
|
|
|
|
Operating
Results
|
|
Cash
flow / Fair value
|
|
-
|
|
(39,291)
|
|
-
|
|
(39,291)
|
Cost
of Goods Sold
|
|
|
|
|
|
|
|
-
|
|
(7,125,034)
|
|
-
|
|
(7,125,034)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests
on Loans and Financing
|
|
|
|
|
|
|
|
-
|
|
-
|
|
(317,077)
|
|
(317,077)
|
Interest
Rate Derivatives result
|
|
|
|
Interest
expenses
|
|
Cash
flow
|
|
-
|
|
-
|
|
(4,164)
|
|
(4,164)
|
Foreign
Exchange variation on assets and liabilities
|
|
|
|
|
|
|
|
(334,800)
|
|
-
|
|
-
|
|
(334,800)
|
Foreign
Exchange Derivatives result
|
|
|
|
Financial
Position
|
|
Not
designated
|
|
233,391
|
|
-
|
|
-
|
|
233,391
|
Financial
Results
|
|
28
|
|
|
|
|
|
(101,409)
|
|
-
|
|
(321,241)
|
|
(422,650)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
Consolidated
|
April
to June 2020
|
|
Reference
|
|
Exposure
|
|
Hedge
accounting
|
|
Foreign
Exchange
|
|
Commodities
|
|
Interest
Rate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Instruments - current
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
451,206
|
|
40,059
|
|
(13,125)
|
|
478,140
|
Derivative
Instruments - non-current
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(71,907)
|
|
-
|
|
-
|
|
(71,907)
|
Non-derivative
Instruments - non-current
|
|
|
|
Foreign
investments
|
|
Net
investment
|
|
(69,236)
|
|
-
|
|
-
|
|
(69,236)
|
Other
Comprehensive Income (1)
|
|
|
|
|
|
|
|
310,063
|
|
40,059
|
|
(13,125)
|
|
336,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
for the period
|
|
|
|
|
|
|
|
|
|
Consolidated
|
January
to June 2020
|
|
Reference
|
|
Exposure
|
|
Hedge
accounting
|
|
Foreign
Exchange
|
|
Commodities
|
|
Interest
Rate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
18,963,157
|
|
-
|
|
-
|
|
18,963,157
|
Derivatives
result
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(910,166)
|
|
-
|
|
-
|
|
(910,166)
|
Net
Revenue
|
|
26
|
|
|
|
|
|
18,052,991
|
|
-
|
|
-
|
|
18,052,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Goods Sold
|
|
|
|
|
|
|
|
-
|
|
(13,754,387)
|
|
-
|
|
(13,754,387)
|
Derivatives
result
|
|
|
|
Operating
Results
|
|
Cash
flow / Fair value
|
|
-
|
|
(66,735)
|
|
-
|
|
(66,735)
|
Cost
of Goods Sold
|
|
|
|
|
|
|
|
-
|
|
(13,821,122)
|
|
-
|
|
(13,821,122)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests
on Loans and Financing
|
|
|
|
|
|
|
|
-
|
|
-
|
|
(631,570)
|
|
(631,570)
|
Interest
Rate Derivatives result
|
|
|
|
Interest
expenses
|
|
Cash
flow
|
|
-
|
|
-
|
|
(399)
|
|
(399)
|
Foreign
Exchange variation on assets and liabilities
|
|
|
|
|
|
|
|
(1,533,734)
|
|
-
|
|
-
|
|
(1,533,734)
|
Foreign
Exchange Derivatives result
|
|
|
|
Financial
Position
|
|
Not
designated
|
|
1,278,563
|
|
-
|
|
-
|
|
1,278,563
|
Financial
Results
|
|
28
|
|
|
|
|
|
(255,171)
|
|
-
|
|
(631,969)
|
|
(887,140)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
Consolidated
|
January
to June 2020
|
|
Reference
|
|
Exposure
|
|
Hedge
accounting
|
|
Foreign
Exchange
|
|
Commodities
|
|
Interest
Rate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Instruments - current
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(751,260)
|
|
32,673
|
|
(29,954)
|
|
(748,541)
|
Derivative
Instruments - non-current
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(374,784)
|
|
-
|
|
-
|
|
(374,784)
|
Non-derivative
Instruments - non-current
|
|
|
|
Foreign
investments
|
|
Net
investment
|
|
(342,111)
|
|
-
|
|
-
|
|
(342,111)
|
Other
Comprehensive Income (1)
|
|
|
|
|
|
|
|
(1,468,155)
|
|
32,673
|
|
(29,954)
|
|
(1,465,436)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
balances
|
|
|
|
|
|
|
|
|
|
Consolidado
|
06.30.20
|
|
Reference
|
|
Exposure
|
|
Hedge
accounting
|
|
Foreign
Exchange
|
|
Commodities
|
|
Interest
Rate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Designated
derivatives
|
|
|
|
Operating
Results
|
|
Cash
flow / Fair value
|
|
(907,747)
|
|
102,526
|
|
(35,561)
|
|
(840,782)
|
Not
designated derivatives
|
|
|
|
Financial
Position
|
|
Not
designated
|
|
(54,149)
|
|
-
|
|
(380)
|
|
(54,529)
|
Asset
/ (Liability) net
|
|
|
|
|
|
|
|
(961,896)
|
|
102,526
|
|
(35,941)
|
|
(895,311)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Instruments - current (2)
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(674,424)
|
|
(7,772)
|
|
(29,954)
|
|
(712,150)
|
Derivative
Instruments - non-current
|
|
|
|
Operating
Results
|
|
Cash
flow
|
|
(951,661)
|
|
-
|
|
-
|
|
(951,661)
|
Non-derivative
Instruments - non-current
|
|
|
|
Foreign
investments
|
|
Net
investment
|
|
(408,929)
|
|
-
|
|
-
|
|
(408,929)
|
Other
Comprehensive Income (1)
|
|
|
|
|
|
|
|
(2,035,014)
|
|
(7,772)
|
|
(29,954)
|
|
(2,072,740)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
result
|
|
|
|
Operating
Results
|
|
Cash
flow / Fair value
|
|
-
|
|
196,590
|
|
-
|
|
196,590
|
Inventories
|
|
7
|
|
|
|
|
|
-
|
|
196,590
|
|
-
|
|
196,590
|
|
(1)
|
All effects are shown gross of taxes.
|
|
(2)
|
Includes R$40,401 related to the time value of the foreign exchange option
contracts.
|
The cash effect of hedge instruments
is presented in the Statement of Cash Flows, as Derivative Financial Instruments.
Summarized financial position
of derivative financial instruments:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
76
|
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
|
|
|
|
|
|
|
Asset
|
|
|
|
|
|
|
|
Designated as hedge accounting
|
|
|
|
|
|
|
|
Currency derivatives
|
101,161
|
|
166,729
|
|
101,161
|
|
166,729
|
Commodities derivatives
|
131,325
|
|
25,191
|
|
131,325
|
|
25,191
|
Not designated as hedge accounting
|
|
|
|
|
|
|
|
Currency derivatives
|
10,152
|
|
51,811
|
|
16,757
|
|
53,395
|
|
242,638
|
|
243,731
|
|
249,243
|
|
245,315
|
|
|
|
|
|
|
|
|
Current assets
|
237,757
|
|
193,740
|
|
244,362
|
|
195,324
|
Non-current assets
|
4,881
|
|
49,991
|
|
4,881
|
|
49,991
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Designated as hedge accounting
|
|
|
|
|
|
|
|
Currency derivatives
|
(1,008,908)
|
|
(73,417)
|
|
(1,008,908)
|
|
(73,417)
|
Commodities derivatives
|
(28,799)
|
|
(48,829)
|
|
(28,799)
|
|
(48,829)
|
Interest rate derivatives
|
(35,561)
|
|
-
|
|
(35,561)
|
|
-
|
Not designated as hedge accounting
|
|
|
|
|
|
|
|
Currency derivatives
|
(68,432)
|
|
(29,479)
|
|
(70,906)
|
|
(31,369)
|
Interest rate derivatives
|
(380)
|
|
-
|
|
(380)
|
|
-
|
|
(1,142,080)
|
|
(151,725)
|
|
(1,144,554)
|
|
(153,615)
|
|
|
|
|
|
|
|
|
Current liabilities
|
(1,098,175)
|
|
(151,722)
|
|
(1,100,649)
|
|
(153,612)
|
Non-current liabilities
|
(43,905)
|
|
(3)
|
|
(43,905)
|
|
(3)
|
|
24.6.
|
Sensitivity analysis
|
The Management understands that
the most relevant risks that may affect the Company’s results are the volatility of commodities prices and foreign exchange
rates. Currently the fluctuation of the interest rates does not affect significantly the Company’s results since Management
has chosen to keep at fixed rates a considerable portion of its debts.
The scenarios below present
the possible impacts of the financial instruments considering situations of increase and decrease in the selected risk factors.
The amounts of exports used correspond to the notional amount of the financial instruments designated for hedge accounting.
The information used in the
preparation of the analysis is based on the position as of June 30, 2020, which has been described in the items above. The future
results may diverge significantly of the estimated values if the reality presents different than the considered premises. Positive
values indicate gains and negative values indicate losses.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
77
|
Parity
- R$ x USD
|
|
5.4760
|
|
4.9284
|
|
4.1070
|
|
6.8450
|
|
8.2140
|
|
|
|
|
Current
|
|
Scenario
I
|
|
Scenario
II
|
|
Scenario
III
|
|
Scenario
IV
|
Transaction/Instrument
|
|
Risk
|
|
Scenario
|
|
10%
appreciation
|
|
25%
appreciation
|
|
25%
devaluation
|
|
50%
devaluation
|
Designated
as hedge accouting
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward
|
|
Devaluation
of R$
|
|
(283,508)
|
|
(65,491)
|
|
261,535
|
|
(828,550)
|
|
(1,373,593)
|
Options
- currencies
|
|
Devaluation
of R$
|
|
(636,684)
|
|
(141,392)
|
|
593,057
|
|
(1,987,147)
|
|
(3,386,265)
|
Bonds
|
|
Devaluation
of R$
|
|
(893,235)
|
|
(751,236)
|
|
(538,237)
|
|
(1,248,233)
|
|
(1,603,231)
|
Exports
(object)
|
|
Appreciation
of R$
|
|
1,572,169
|
|
893,808
|
|
(115,245)
|
|
3,380,305
|
|
5,237,096
|
Cost
(object)
|
|
Appreciation
of R$
|
|
241,258
|
|
64,311
|
|
(201,110)
|
|
683,625
|
|
1,125,993
|
Not
designated as hedge accouting
|
|
|
|
|
|
|
|
|
|
|
|
|
NDF
- Purchase
|
|
Appreciation
of R$
|
|
(612)
|
|
(186,796)
|
|
(466,072)
|
|
464,848
|
|
930,308
|
NDF
- Sale
|
|
Devaluation
of R$
|
|
17,262
|
|
9,048
|
|
(3,273)
|
|
37,797
|
|
58,332
|
Options
- currencies
|
|
Devaluation
of R$
|
|
(36,467)
|
|
(19,491)
|
|
496
|
|
(78,906)
|
|
(121,345)
|
Future
purchase - B3
|
|
Appreciation
of R$
|
|
4,612
|
|
(65,617)
|
|
(170,962)
|
|
180,187
|
|
355,761
|
Net
effect
|
|
|
|
(15,205)
|
|
(262,856)
|
|
(639,811)
|
|
603,926
|
|
1,223,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parity
- R$ x EUR
|
|
|
|
6.1539
|
|
5.5385
|
|
4.6154
|
|
7.6924
|
|
9.2309
|
|
|
|
|
Current
|
|
Scenario
I
|
|
Scenario
II
|
|
Scenario
III
|
|
Scenario
IV
|
Transaction/Instrument
|
|
Risk
|
|
Scenario
|
|
10%
appreciation
|
|
25%
appreciation
|
|
25%
devaluation
|
|
50%
devaluation
|
Not
designated as hedge accouting
|
|
|
|
|
|
|
|
|
|
|
|
|
NDF
- Purchase EUR x USD
|
|
Appreciation
of EUR
|
|
41
|
|
(33,806)
|
|
(84,575)
|
|
84,658
|
|
169,274
|
NDF
- Purchase EUR x RUB
|
|
Appreciation
of EUR
|
|
900
|
|
(9,654)
|
|
(21,124)
|
|
37,456
|
|
88,546
|
NDF
- Purchase
|
|
Appreciation
of R$
|
|
(817)
|
|
(163,895)
|
|
(408,513)
|
|
406,879
|
|
814,575
|
Net
effect
|
|
|
|
124
|
|
(207,355)
|
|
(514,212)
|
|
528,993
|
|
1,072,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price
parity CBOT - Corn - USD/Ton
|
|
|
|
141.35
|
|
127.22
|
|
106.01
|
|
176.69
|
|
212.03
|
|
|
|
|
Current
|
|
Scenario
I
|
|
Scenario
II
|
|
Scenario
III
|
|
Scenario
IV
|
Transaction/Instrument
|
|
Risk
|
|
Scenario
|
|
Decrease
10%
|
|
Decrease
25%
|
|
Increase
25%
|
|
Increase
50%
|
Designated
as hedge accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward - Corn sale
|
|
Increase
in the price of corn
|
|
100,447
|
|
253,266
|
|
482,495
|
|
(281,601)
|
|
(663,650)
|
Non-deliverable
forward - Corn purchase
|
|
Decrease
in the price of corn
|
|
3,589
|
|
(4,151)
|
|
(15,761)
|
|
22,940
|
|
42,291
|
Cost
(object)
|
|
Increase
in the price of corn
|
|
(104,036)
|
|
(249,115)
|
|
(466,734)
|
|
258,661
|
|
621,359
|
Net
effect
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price
parity CBOT - Soybean meal - USD/Ton
|
|
|
|
115.44
|
|
103.90
|
|
86.58
|
|
144.30
|
|
173.17
|
|
|
|
|
Current
|
|
Scenario
I
|
|
Scenario
II
|
|
Scenario
III
|
|
Scenario
IV
|
Transaction/Instrument
|
|
Risk
|
|
Scenario
|
|
Decrease
10%
|
|
Decrease
25%
|
|
Increase
25%
|
|
Increase
50%
|
Designated
as hedge accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deliverable
forward - Soybeal meal purchase
|
|
Decrease
in the price of soybean meal
|
|
(2,951)
|
|
(13,696)
|
|
(29,814)
|
|
23,912
|
|
50,775
|
Cost
(object)
|
|
Increase
in the price of soybean meal
|
|
2,951
|
|
13,696
|
|
29,814
|
|
(23,912)
|
|
(50,775)
|
Net
effect
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price
parity CBOT - Soybean - USD/Ton
|
|
|
|
323.28
|
|
290.95
|
|
242.46
|
|
404.10
|
|
484.92
|
|
|
|
|
Current
|
|
Scenario
I
|
|
Scenario
II
|
|
Scenario
III
|
|
Scenario
IV
|
Transaction/Instrument
|
|
Risk
|
|
Scenario
|
|
Decrease
10%
|
|
Decrease
25%
|
|
Increase
25%
|
|
Increase
50%
|
Designated
as hedge accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
NDF
- Soybean sale
|
|
Increase
in the price of soybean
|
|
6,340
|
|
19,789
|
|
39,964
|
|
(27,284)
|
|
(60,908)
|
NDF
- Soybean purchase
|
|
Decrease
in the price of soybean
|
|
(312)
|
|
(1,197)
|
|
(2,525)
|
|
1,901
|
|
4,114
|
Soybean
options
|
|
Decrease
in the price of soybean
|
|
(179)
|
|
(886)
|
|
(1,948)
|
|
1,275
|
|
3,044
|
Cost
(object)
|
|
Increase
in the price of soybean
|
|
(5,849)
|
|
(17,706)
|
|
(35,491)
|
|
24,108
|
|
53,750
|
Net
effect
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price
parity CBOT - Soybean oil - USD/Ton
|
|
|
|
634.10
|
|
570.69
|
|
475.58
|
|
792.63
|
|
951.15
|
|
|
|
|
Current
|
|
Scenario
I
|
|
Scenario
II
|
|
Scenario
III
|
|
Scenario
IV
|
Transaction/Instrument
|
|
Risk
|
|
Scenario
|
|
Decrease
10%
|
|
Decrease
25%
|
|
Increase
25%
|
|
Increase
50%
|
Designated
as hedge accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
NDF
- Soybean oil purchase
|
|
Decrease
in the price of soybean oil
|
|
2,576
|
|
(17,733)
|
|
(48,196)
|
|
53,348
|
|
104,120
|
Cost
(object)
|
|
Increase
in the price of soybean oil
|
|
(2,576)
|
|
17,733
|
|
48,196
|
|
(53,348)
|
|
(104,120)
|
Net
effect
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
78
|
|
24.7.
|
Financial instruments by category
|
|
Parent company
|
|
06.30.20
|
|
Amortized cost
|
|
Fair value through profit and loss
|
|
Total
|
Assets
|
|
|
|
|
|
Cash and bank
|
71,911
|
|
-
|
|
71,911
|
Cash equivalents
|
-
|
|
4,397,396
|
|
4,397,396
|
Marketable securities
|
-
|
|
324,188
|
|
324,188
|
Restricted cash
|
24,179
|
|
-
|
|
24,179
|
Trade accounts receivable
|
6,335,207
|
|
196,563
|
|
6,531,770
|
Other receivables
|
110,418
|
|
-
|
|
110,418
|
Derivatives not designated
|
-
|
|
10,152
|
|
10,152
|
Derivatives designated as hedge accounting (1)
|
-
|
|
232,486
|
|
232,486
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Trade accounts payable
|
(5,966,405)
|
|
-
|
|
(5,966,405)
|
Supply chain finance
|
(982,237)
|
|
-
|
|
(982,237)
|
Loans and financing (2)
|
(21,665,812)
|
|
-
|
|
(21,665,812)
|
Derivatives not designated
|
-
|
|
(68,812)
|
|
(68,812)
|
Derivatives designated as hedge accounting (1)
|
-
|
|
(1,073,268)
|
|
(1,073,268)
|
|
(22,072,739)
|
|
4,018,705
|
|
(18,054,034)
|
|
(1)
|
All derivatives are measured at fair value. Those designated as hedge
accounting have their gains and losses also affecting other comprehensive income and inventories.
|
|
(2)
|
All loans and borrowings are measured at amortized cost. Those designated
as hedge accounting have their gains and losses also affecting shareholders’ equity.
|
|
Parent company
|
|
12.31.19
|
|
Amortized cost
|
|
Fair value through profit and loss
|
|
Total
|
Assets
|
|
|
|
|
|
Cash and bank
|
170,902
|
|
-
|
|
170,902
|
Cash equivalents
|
-
|
|
1,198,078
|
|
1,198,078
|
Marketable securities
|
-
|
|
411,885
|
|
411,885
|
Restricted cash
|
296,294
|
|
-
|
|
296,294
|
Trade accounts receivable
|
5,878,791
|
|
225,941
|
|
6,104,732
|
Other receivables
|
120,234
|
|
-
|
|
120,234
|
Derivatives not designated
|
-
|
|
51,811
|
|
51,811
|
Derivatives designated as hedge accounting (1)
|
-
|
|
191,920
|
|
191,920
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Trade accounts payable - Restated
|
(5,283,109)
|
|
-
|
|
(5,283,109)
|
Supply chain finance
|
(842,037)
|
|
-
|
|
(842,037)
|
Loans and financing (2)
|
(16,429,004)
|
|
-
|
|
(16,429,004)
|
Derivatives not designated
|
-
|
|
(29,479)
|
|
(29,479)
|
Derivatives designated as hedge accounting (1)
|
-
|
|
(122,246)
|
|
(122,246)
|
|
(16,087,929)
|
|
1,927,910
|
|
(14,160,019)
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
79
|
|
Consolidated
|
|
06.30.20
|
|
Amortized cost
|
|
Fair value through other comprehensive income
|
|
Fair value through profit and loss
|
|
Total
|
|
|
Equity instruments
|
|
Debt instruments
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and bank
|
3,358,771
|
|
-
|
|
-
|
|
-
|
|
3,358,771
|
Cash equivalents
|
-
|
|
-
|
|
-
|
|
6,312,504
|
|
6,312,504
|
Marketable securities
|
358,421
|
|
42,307
|
|
25,899
|
|
326,012
|
|
752,639
|
Restricted cash
|
24,179
|
|
-
|
|
-
|
|
-
|
|
24,179
|
Trade accounts receivable
|
2,600,004
|
|
-
|
|
-
|
|
196,563
|
|
2,796,567
|
Other receivables
|
115,304
|
|
-
|
|
-
|
|
-
|
|
115,304
|
Derivatives not designated
|
-
|
|
-
|
|
-
|
|
16,757
|
|
16,757
|
Derivatives designated as hedge accounting (1)
|
-
|
|
-
|
|
-
|
|
232,486
|
|
232,486
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
(6,733,213)
|
|
-
|
|
-
|
|
-
|
|
(6,733,213)
|
Supply chain finance
|
(982,237)
|
|
-
|
|
-
|
|
-
|
|
(982,237)
|
Loans and financing (2)
|
(24,863,551)
|
|
-
|
|
-
|
|
-
|
|
(24,863,551)
|
Derivatives not designated
|
-
|
|
-
|
|
-
|
|
(71,286)
|
|
(71,286)
|
Derivatives designated as hedge accounting (1)
|
-
|
|
-
|
|
-
|
|
(1,073,268)
|
|
(1,073,268)
|
Written option– business combination
|
-
|
|
-
|
|
-
|
|
(422,188)
|
|
(422,188)
|
|
(26,122,322)
|
|
42,307
|
|
25,899
|
|
5,517,580
|
|
(20,536,536)
|
|
(1)
|
All derivatives are measured at fair value. Those designated as hedge
accounting have their gains and losses also affecting other comprehensive income and inventories.
|
|
(2)
|
All loans and borrowings are measured at amortized cost. Those designated
as hedge accounting have their gains and losses also affecting shareholders’ equity.
|
|
Consolidated
|
|
12.31.19
|
|
Amortized cost
|
|
Fair value through other comprehensive income
|
|
Fair value through profit and loss
|
|
Total
|
|
|
Equity instruments
|
|
Debt instruments
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and bank
|
2,289,787
|
|
-
|
|
-
|
|
-
|
|
2,289,787
|
Cash equivalents
|
-
|
|
-
|
|
-
|
|
1,947,998
|
|
1,947,998
|
Marketable securities
|
265,783
|
|
26,678
|
|
19,285
|
|
413,788
|
|
725,534
|
Restricted cash
|
296,294
|
|
-
|
|
-
|
|
-
|
|
296,294
|
Trade accounts receivable
|
2,811,902
|
|
-
|
|
-
|
|
225,941
|
|
3,037,843
|
Other receivables
|
123,877
|
|
-
|
|
-
|
|
-
|
|
123,877
|
Derivatives not designated
|
-
|
|
-
|
|
-
|
|
53,395
|
|
53,395
|
Derivatives designated as hedge accounting
|
-
|
|
-
|
|
-
|
|
191,920
|
|
191,920
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Trade accounts payable - Restated
|
(5,796,766)
|
|
-
|
|
-
|
|
-
|
|
(5,796,766)
|
Supply chain finance
|
(842,037)
|
|
-
|
|
-
|
|
-
|
|
(842,037)
|
Loans and financing
|
(18,620,279)
|
|
-
|
|
-
|
|
-
|
|
(18,620,279)
|
Derivatives not designated
|
-
|
|
-
|
|
-
|
|
(31,369)
|
|
(31,369)
|
Derivatives designated as hedge accounting
|
-
|
|
-
|
|
-
|
|
(122,246)
|
|
(122,246)
|
Written option– business combination
|
-
|
|
-
|
|
-
|
|
(706,920)
|
|
(706,920)
|
|
(19,471,439)
|
|
26,678
|
|
19,285
|
|
1,972,507
|
|
(17,452,969)
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
80
|
|
24.8.
|
Fair value of financial instruments
|
The fair value is the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date.
Depending on the inputs used
for measurement, the financial instruments at fair value may be classified into 3 hierarchy levels:
|
»
|
Level 1 – Uses quoted prices (unadjusted) for identical instruments in active markets. In
this category are classified investments in stocks, credit linked notes, savings accounts, overnights, term deposits, Financial
Treasury Bills (“LFT”) and investment funds;
|
|
»
|
Level 2 – Uses prices quoted in active markets for similar instruments, prices quoted for
identical or similar instruments in non-active markets and evaluation models for which inputs are observable. In this level are
classified the investments in Bank Deposit Certificates (“CDB”) and derivatives, which are measured by well-known pricing
models: discounted cash flows and Black-Scholes. The observable inputs are interest rates and curves, volatility factors and foreign
exchange rates;
|
|
»
|
Level 3 – Instruments for which significant inputs are non-observable. The Company has a
financial liability arising from a put option written in the context of a business combination. This option gives the non-controlling
shareholder the right to sell its equity stake in the subsidiary for an amount equivalent to a multiple of the income before taxes,
interests, depreciation and amortization of the economic group of this subsidiary in the last 12 months prior to the exercise.
The exercise period is comprised of the six-month period beginning on May 25, 2021. This liability is measured at fair value using
internal assumptions regarding the results of that economic group. The effects of the remeasurement resulted in a gain in financial
results of R$390,353 in the six-month period ended on June 30, 2020 (loss of R$19,967 in the same period of the prior year), as
per note 28.
|
The table below presents the
overall classification of financial instruments measured at fair value by measurement hierarchy. For the six-month period ended
on June 30, 2020, there were no changes among the 3 levels of hierarchy.
|
Parent company
|
|
06.30.20
|
|
12.31.19
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
Fair value through profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
Savings account and overnight
|
302,958
|
|
-
|
|
302,958
|
|
70,515
|
|
-
|
|
70,515
|
Term deposits
|
-
|
|
-
|
|
-
|
|
254,583
|
|
-
|
|
254,583
|
Bank deposit certificates
|
-
|
|
4,090,514
|
|
4,090,514
|
|
-
|
|
869,473
|
|
869,473
|
Financial treasury bills
|
309,460
|
|
-
|
|
309,460
|
|
396,994
|
|
-
|
|
396,994
|
Investment funds
|
18,652
|
|
-
|
|
18,652
|
|
18,398
|
|
-
|
|
18,398
|
Trade accounts receivable
|
-
|
|
196,563
|
|
196,563
|
|
-
|
|
225,941
|
|
225,941
|
Derivatives
|
-
|
|
242,638
|
|
242,638
|
|
-
|
|
243,731
|
|
243,731
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Fair value through profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
-
|
|
(1,142,080)
|
|
(1,142,080)
|
|
-
|
|
(151,725)
|
|
(151,725)
|
|
631,070
|
|
3,387,635
|
|
4,018,705
|
|
740,490
|
|
1,187,420
|
|
1,927,910
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
81
|
|
Consolidated
|
|
06.30.20
|
|
12.31.19
|
|
Level
1
|
|
Level
2
|
|
Level
3
|
|
Total
|
|
Level
1
|
|
Level
2
|
|
Level
3
|
|
Total
|
Financial
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value through other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
linked notes
|
25,899
|
|
-
|
|
-
|
|
25,899
|
|
19,285
|
|
-
|
|
-
|
|
19,285
|
Stocks
|
42,307
|
|
-
|
|
-
|
|
42,307
|
|
26,678
|
|
-
|
|
-
|
|
26,678
|
Fair
value through profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
account and overnight
|
2,132,116
|
|
-
|
|
-
|
|
2,132,116
|
|
689,874
|
|
-
|
|
-
|
|
689,874
|
Term
deposits
|
72,106
|
|
-
|
|
|
|
72,106
|
|
374,859
|
|
-
|
|
-
|
|
374,859
|
Bank
deposit certificates
|
-
|
|
4,104,358
|
|
-
|
|
4,104,358
|
|
-
|
|
879,758
|
|
-
|
|
879,758
|
Financial
treasury bills
|
309,460
|
|
-
|
|
-
|
|
309,460
|
|
396,994
|
|
-
|
|
-
|
|
396,994
|
Investment
funds
|
20,476
|
|
-
|
|
-
|
|
20,476
|
|
20,301
|
|
-
|
|
-
|
|
20,301
|
Trade
accounts receivable
|
-
|
|
196,563
|
|
-
|
|
196,563
|
|
-
|
|
225,941
|
|
-
|
|
225,941
|
Derivatives
|
-
|
|
249,243
|
|
-
|
|
249,243
|
|
-
|
|
245,315
|
|
-
|
|
245,315
|
Financial
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value through profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
-
|
|
(1,144,554)
|
|
-
|
|
(1,144,554)
|
|
-
|
|
(153,615)
|
|
-
|
|
(153,615)
|
Written
option– business combination
|
-
|
|
-
|
|
(422,188)
|
|
(422,188)
|
|
-
|
|
-
|
|
(706,920)
|
|
(706,920)
|
|
2,602,364
|
|
3,405,610
|
|
(422,188)
|
|
5,585,786
|
|
1,527,991
|
|
1,197,399
|
|
(706,920)
|
|
2,018,470
|
Except for the items set forth
below, the fair value of all other financial instruments is approximate to their book value. The fair value of the bonds set forth
below is based in prices observed in active markets, level 1 of the fair value hierarchy, while the debentures are based in level
2 and are measured by discounted cash flows.
|
Parent company and Consolidated
|
|
|
|
06.30.20
|
|
12.31.19
|
|
Maturity
|
|
Book
value
|
|
Fair
value
|
|
Book
value
|
|
Fair
value
|
BRF bonds
|
|
|
|
|
|
|
|
|
|
BRF SA BRFSBZ5
|
2022
|
|
(595,863)
|
|
(623,833)
|
|
(435,934)
|
|
(460,606)
|
BRF SA BRFSBZ4
|
2024
|
|
(2,840,225)
|
|
(2,878,792)
|
|
(2,086,169)
|
|
(2,191,726)
|
BRF SA BRFSBZ3
|
2023
|
|
(1,877,298)
|
|
(1,897,818)
|
|
(1,370,446)
|
|
(1,427,754)
|
BRF SA BRFSBZ2
|
2022
|
|
(2,000,452)
|
|
(1,996,879)
|
|
(1,492,653)
|
|
(1,559,476)
|
BRF SA BRFSBZ4 7/8
|
2030
|
|
(4,163,225)
|
|
(3,992,887)
|
|
(3,022,773)
|
|
(3,160,573)
|
Debentures
|
2030
|
|
(757,016)
|
|
(822,166)
|
|
(755,760)
|
|
(832,213)
|
Parent company
|
|
|
(12,234,079)
|
|
(12,212,375)
|
|
(9,163,735)
|
|
(9,632,348)
|
|
|
|
|
|
|
|
|
|
|
BRF GmbH bonds
|
|
|
|
|
|
|
|
|
|
BRF SA BRFSBZ4
|
2026
|
|
(2,719,565)
|
|
(2,683,338)
|
|
(1,999,509)
|
|
(2,101,175)
|
Consolidated
|
|
|
(14,953,644)
|
|
(14,895,713)
|
|
(11,163,244)
|
|
(11,733,523)
|
The operating segments are reported
consistently with the management reports provided to the main strategic and operational decision makers for assessing the performance
of each segment and allocation of resources. The operating segments information are elaborated considering three reportable segments,
being: Brazil, International and Other Segments.
The operating segments include
the sales of all distribution channels and are subdivided according to the nature of the products whose characteristics are described
below:
|
»
|
Poultry: production and sale of whole poultry and in-natura cuts.
|
|
»
|
Pork and other: production and sale of in-natura cuts.
|
|
»
|
Processed: production and sale of processed food, frozen and processed products derived
from poultry, pork and beef, margarine, vegetables and soybean-based products.
|
|
»
|
Other sales: sale of flour for food service and others.
|
Other segments are comprised
of commercialization and development of animal nutrition ingredients, human nutrition, plant nutrition (fertilizers) and health
care (health and wellness), as well as commercialization of agricultural products.
The net sales for each reportable
operating segment is set forth below:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
82
|
|
|
Consolidated
|
Net sales
|
|
April to June 2020
|
|
January to June 2020
|
|
April to June 2019
|
|
January to June 2019
|
Brazil
|
|
|
|
|
|
|
|
|
In-natura
|
|
1,093,445
|
|
2,350,532
|
|
1,140,672
|
|
2,239,820
|
Poultry
|
|
793,689
|
|
1,763,725
|
|
908,900
|
|
1,794,305
|
Pork and other
|
|
299,756
|
|
586,807
|
|
231,772
|
|
445,515
|
Processed
|
|
3,541,008
|
|
6,933,812
|
|
2,937,848
|
|
5,775,094
|
Other sales
|
|
8,402
|
|
13,665
|
|
3,176
|
|
7,249
|
|
|
4,642,855
|
|
9,298,009
|
|
4,081,696
|
|
8,022,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
In-natura
|
|
3,563,006
|
|
7,016,267
|
|
3,373,477
|
|
6,009,675
|
Poultry
|
|
3,007,661
|
|
5,978,347
|
|
3,040,066
|
|
5,449,083
|
Pork and other
|
|
555,345
|
|
1,037,920
|
|
333,411
|
|
560,592
|
Processed
|
|
563,054
|
|
1,074,175
|
|
547,066
|
|
1,048,979
|
Other sales
|
|
81,226
|
|
132,547
|
|
64,955
|
|
120,715
|
|
|
4,207,286
|
|
8,222,989
|
|
3,985,498
|
|
7,179,369
|
|
|
|
|
|
|
|
|
|
Other segments
|
|
253,785
|
|
531,993
|
|
270,815
|
|
495,727
|
|
|
9,103,926
|
|
18,052,991
|
|
8,338,009
|
|
15,697,259
|
The operating income (loss)
for each segment is set forth below:
|
|
Consolidated
|
|
|
April to June 2020
|
|
January to June 2020
|
|
April to June 2019
|
|
January to June 2019
|
Brazil
|
|
352,266
|
|
716,145
|
|
490,325
|
|
556,933
|
International
|
|
227,685
|
|
668,333
|
|
425,668
|
|
551,134
|
Other segments
|
|
22,628
|
|
60,157
|
|
40,557
|
|
40,531
|
Sub total
|
|
602,579
|
|
1,444,635
|
|
956,550
|
|
1,148,598
|
Corporate
|
|
(15,392)
|
|
(302,769)
|
|
(26,509)
|
|
(60,359)
|
|
|
587,187
|
|
1,141,866
|
|
930,041
|
|
1,088,239
|
The items presented above as
Corporate refer to relevant events not attributable to the normal course of business neither to the operating segments. The composition
of the main effects in the Corporate segment is set forth below:
|
|
Consolidated
|
Corporate
|
|
April to June 2020
|
|
January to June 2020
|
|
April to June 2019
|
|
January to June 2019
|
|
|
|
|
|
|
|
|
|
Investigations involving the Company (note 1.2)
|
|
(11,771)
|
|
(24,072)
|
|
(31,207)
|
|
(42,320)
|
Agreement - Class Action (note 1.3)
|
|
-
|
|
(204,436)
|
|
-
|
|
-
|
Tax and Civil Contingencies (note )
|
|
(19,263)
|
|
(59,889)
|
|
4,503
|
|
4,246
|
Arbitration reversal
|
|
14,520
|
|
14,520
|
|
-
|
|
-
|
COVID-19 - Expenses and expcted credit losses
|
|
(2,182)
|
|
(26,260)
|
|
-
|
|
-
|
Restructuring plan
|
|
-
|
|
-
|
|
-
|
|
(16,431)
|
Other
|
|
3,304
|
|
(2,632)
|
|
195
|
|
(5,854)
|
|
|
(15,392)
|
|
(302,769)
|
|
(26,509)
|
|
(60,359)
|
No customer individually or
in aggregate (economic group) accounted for more than 5% of net sales for the six-month period ended on June 30, 2020 and 2019.
The goodwill arising from business
combinations and the intangible assets with indefinite useful life (trademarks) were allocated to the reportable operating segments,
considering the economic benefits generated by such intangible assets. The allocation of these intangible assets is presented below:
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
83
|
|
Consolidated
|
|
Goodwill
|
|
Trademarks
|
|
Total
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
Brazil
|
1,151,498
|
|
1,151,498
|
|
982,478
|
|
982,478
|
|
2,133,976
|
|
2,133,976
|
International
|
1,860,242
|
|
1,562,104
|
|
370,117
|
|
339,784
|
|
2,230,359
|
|
1,901,888
|
|
3,011,740
|
|
2,713,602
|
|
1,352,595
|
|
1,322,262
|
|
4,364,335
|
|
4,035,864
|
Information related to total
assets by reportable segment is not disclosed, as it is not included in the set of information made available to the Company’s
administration, which makes investment decisions and determine allocation of resources based on information about the consolidated
assets.
|
Parent
company
|
|
Consolidated
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
Gross
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
5,739,830
|
|
11,506,128
|
|
5,069,822
|
|
9,951,874
|
|
5,739,830
|
|
11,506,128
|
|
5,069,822
|
|
9,951,942
|
International
|
2,198,586
|
|
4,751,730
|
|
2,704,490
|
|
4,970,220
|
|
4,537,513
|
|
8,804,578
|
|
4,289,643
|
|
7,745,612
|
Other
segments
|
274,412
|
|
566,044
|
|
298,480
|
|
558,305
|
|
283,285
|
|
590,579
|
|
305,893
|
|
554,970
|
|
8,212,828
|
|
16,823,902
|
|
8,072,792
|
|
15,480,399
|
|
10,560,628
|
|
20,901,285
|
|
9,665,358
|
|
18,252,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
(1,096,975)
|
|
(2,208,119)
|
|
(988,126)
|
|
(1,929,779)
|
|
(1,096,975)
|
|
(2,208,119)
|
|
(988,126)
|
|
(1,929,779)
|
International
|
(24,698)
|
|
(48,646)
|
|
(30,665)
|
|
(55,620)
|
|
(330,227)
|
|
(581,589)
|
|
(304,145)
|
|
(566,243)
|
Other
segments
|
(27,746)
|
|
(54,683)
|
|
(28,153)
|
|
(51,206)
|
|
(29,500)
|
|
(58,586)
|
|
(35,078)
|
|
(59,243)
|
|
(1,149,419)
|
|
(2,311,448)
|
|
(1,046,944)
|
|
(2,036,605)
|
|
(1,456,702)
|
|
(2,848,294)
|
|
(1,327,349)
|
|
(2,555,265)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
4,642,855
|
|
9,298,009
|
|
4,081,696
|
|
8,022,095
|
|
4,642,855
|
|
9,298,009
|
|
4,081,696
|
|
8,022,163
|
International
|
2,173,888
|
|
4,703,084
|
|
2,673,825
|
|
4,914,600
|
|
4,207,286
|
|
8,222,989
|
|
3,985,498
|
|
7,179,369
|
Other
segments
|
246,666
|
|
511,361
|
|
270,327
|
|
507,099
|
|
253,785
|
|
531,993
|
|
270,815
|
|
495,727
|
|
7,063,409
|
|
14,512,454
|
|
7,025,848
|
|
13,443,794
|
|
9,103,926
|
|
18,052,991
|
|
8,338,009
|
|
15,697,259
|
|
27.
|
OTHER OPERATING INCOME (EXPENSES), NET
|
|
Parent
company
|
|
Consolidated
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
Recovery
of expenses (1)
|
156,174
|
|
234,651
|
|
695,513
|
|
703,323
|
|
156,370
|
|
235,057
|
|
695,814
|
|
704,811
|
Provision
reversal
|
70,625
|
|
70,625
|
|
357
|
|
14,080
|
|
70,625
|
|
70,625
|
|
357
|
|
14,085
|
Scrap
sales
|
2,742
|
|
5,434
|
|
2,868
|
|
5,865
|
|
2,787
|
|
5,562
|
|
3,221
|
|
6,837
|
Provision
for civil and tax risks (2)
|
(22,796)
|
|
(65,272)
|
|
(356,726)
|
|
(363,884)
|
|
(23,045)
|
|
(65,520)
|
|
(356,210)
|
|
(363,918)
|
Other
employees benefits
|
(8,214)
|
|
(15,649)
|
|
(7,458)
|
|
(14,916)
|
|
(8,214)
|
|
(15,649)
|
|
(9,918)
|
|
(17,374)
|
Insurance
claims costs
|
(1,791)
|
|
(5,476)
|
|
(2,345)
|
|
(13,845)
|
|
(828)
|
|
(2,517)
|
|
(2,193)
|
|
(14,977)
|
Net
gains (losses) from the disposals of investments
|
-
|
|
-
|
|
(482)
|
|
(482)
|
|
223
|
|
256
|
|
(2,354)
|
|
(2,354)
|
Net
gains (losses) from the disposals of property, plant and equipment
|
7,390
|
|
(2,380)
|
|
13,978
|
|
24,223
|
|
3,467
|
|
(7,409)
|
|
9,128
|
|
18,248
|
Employee
participation and bonuses
|
(71,874)
|
|
(121,399)
|
|
(51,873)
|
|
(101,684)
|
|
(71,347)
|
|
(117,992)
|
|
(52,843)
|
|
(110,455)
|
Demobilization
expenses
|
(2,108)
|
|
(5,863)
|
|
(8,404)
|
|
(17,187)
|
|
(1,998)
|
|
(6,255)
|
|
(10,949)
|
|
(21,932)
|
Expenses
with investigations and class action (3)
|
(9,773)
|
|
(204,757)
|
|
(23,921)
|
|
(35,034)
|
|
(11,771)
|
|
(209,151)
|
|
(31,207)
|
|
(42,320)
|
Expected
credit losses in other receivables
|
(92)
|
|
(3,185)
|
|
-
|
|
-
|
|
308
|
|
(3,157)
|
|
-
|
|
-
|
Other
|
26,938
|
|
29,161
|
|
1,501
|
|
(24,943)
|
|
21,976
|
|
16,150
|
|
(12,369)
|
|
(16,850)
|
|
147,221
|
|
(84,110)
|
|
263,008
|
|
175,516
|
|
138,553
|
|
(100,000)
|
|
230,477
|
|
153,801
|
|
(1)
|
Includes recovery of PIS and COFINS taxes on marketing, rebates and
benefit expenses in the amount of R$224,466 for the six-month period ended on June 30, 2020 and R$150,509 for the three-month period
ended on June 30,2020. For the three-month and six-month periods ended on June 30, 2019, includes the effects of the final decision
related to the exclusion of ICMS from the PIS and COFINS calculation base of R$696,127.
|
|
(2)
|
For the three-month and six-month periods ended on June 30, 2019,
includes the effects of the tax contingency on ICMS credit in the basic food basket products of R$358,935.
|
|
(3)
|
Includes provision for class action agreement (note 1.3) in the first
quarter of 2020.
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
84
|
|
28.
|
FINANCIAL INCOME (EXPENSES), NET
|
|
|
|
Parent
company
|
|
Consolidated
|
|
Note
|
|
April
to June 2020
|
|
January
to June 2020
|
|
Restated
(1)
April to June 2019
|
|
Restated
(1)
January to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
Restated
(1)
April to June 2019
|
|
Restated
(1)
January to June 2019
|
Financial
income
|
|
|
66,332
|
|
173,109
|
|
460,656
|
|
540,550
|
|
81,833
|
|
194,711
|
|
474,668
|
|
560,729
|
Interest
on cash and cash equivalents
|
4
|
|
32,813
|
|
53,847
|
|
22,828
|
|
59,692
|
|
21,474
|
|
51,029
|
|
34,901
|
|
69,451
|
Revenues
from marketable securities
|
5
|
|
2,478
|
|
21,921
|
|
26,152
|
|
44,642
|
|
28,800
|
|
45,387
|
|
27,868
|
|
54,404
|
Fair
value throught other comprehensive income
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
243
|
|
454
|
|
152
|
|
323
|
Fair
value throught profit and loss
|
|
|
2,306
|
|
6,060
|
|
5,740
|
|
10,244
|
|
2,305
|
|
5,716
|
|
5,352
|
|
9,856
|
Amortized
cost
|
|
|
172
|
|
15,861
|
|
20,412
|
|
34,398
|
|
26,252
|
|
39,217
|
|
22,364
|
|
44,225
|
Interest
on recoverable taxes
|
9
|
|
23,659
|
|
80,256
|
|
401,731
|
|
419,335
|
|
23,704
|
|
80,340
|
|
401,797
|
|
419,467
|
Interest
on other assets
|
|
|
7,382
|
|
17,085
|
|
9,945
|
|
16,881
|
|
7,855
|
|
17,955
|
|
10,102
|
|
17,407
|
Financial
expenses
|
|
|
(577,883)
|
|
(1,192,623)
|
|
(982,549)
|
|
(1,494,651)
|
|
(166,563)
|
|
(735,913)
|
|
(1,048,018)
|
|
(1,551,277)
|
Interest
on loans and financing
|
15
|
|
(272,631)
|
|
(550,464)
|
|
(299,517)
|
|
(588,543)
|
|
(317,077)
|
|
(631,570)
|
|
(340,960)
|
|
(674,531)
|
Interest
with related parties
|
30
|
|
(100,565)
|
|
(181,326)
|
|
(37,672)
|
|
(76,070)
|
|
-
|
|
-
|
|
-
|
|
-
|
Interest
on contingencies
|
21
|
|
(38,121)
|
|
(104,164)
|
|
(437,637)
|
|
(456,591)
|
|
(39,042)
|
|
(105,940)
|
|
(437,637)
|
|
(457,436)
|
Interest
on leases
|
18
|
|
(47,015)
|
|
(95,261)
|
|
(45,284)
|
|
(90,830)
|
|
(51,494)
|
|
(103,863)
|
|
(49,651)
|
|
(99,707)
|
Interest
on other liabilities
|
|
|
3,956
|
|
5,360
|
|
(20,961)
|
|
(26,316)
|
|
3,977
|
|
5,384
|
|
(21,320)
|
|
(4,984)
|
Written
option - Business combination (2)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
337,677
|
|
390,353
|
|
(20,056)
|
|
(19,967)
|
Adjustment
to present value
|
6
e 16
|
|
(90,680)
|
|
(181,468)
|
|
(76,011)
|
|
(143,501)
|
|
(90,557)
|
|
(181,498)
|
|
(76,634)
|
|
(145,092)
|
Other
|
|
|
(32,827)
|
|
(85,300)
|
|
(65,467)
|
|
(112,800)
|
|
(10,047)
|
|
(108,779)
|
|
(101,760)
|
|
(149,560)
|
Monetary,
exchange and derivative results, net
|
|
|
(1,037,987)
|
|
(4,851,516)
|
|
68,931
|
|
(75,350)
|
|
(105,573)
|
|
(255,570)
|
|
(45,972)
|
|
(77,039)
|
Exchange
rate variation on monetary assets and liabilities
|
|
|
(1,265,586)
|
|
(6,120,056)
|
|
162,148
|
|
70,690
|
|
(334,800)
|
|
(1,533,734)
|
|
46,854
|
|
82,544
|
Derivative
results
|
|
|
227,599
|
|
1,268,540
|
|
(93,217)
|
|
(146,040)
|
|
229,227
|
|
1,278,164
|
|
(92,826)
|
|
(159,583)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,549,538)
|
|
(5,871,030)
|
|
(452,962)
|
|
(1,029,451)
|
|
(190,303)
|
|
(796,772)
|
|
(619,322)
|
|
(1,067,587)
|
|
(1)
|
The comparative period was restated for better disclosure of exchange
variations effects and derivative results.
|
|
(2)
|
Refers to the fair value remeasurement of the written option recorded
from business combination (note 24.8).
|
|
29.
|
STATEMENT OF INCOME BY NATURE
|
The Company has chosen to disclose
its statement of income by function and thus presents below the details by nature:
|
Parent
company
|
|
Consolidated
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
Costs
of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials and consumables (1)
|
4,231,356
|
|
8,139,255
|
|
3,770,516
|
|
7,206,588
|
|
5,047,664
|
|
9,722,981
|
|
4,298,158
|
|
8,224,665
|
Salaries
and employees benefits
|
983,001
|
|
1,914,252
|
|
896,650
|
|
1,759,779
|
|
1,002,007
|
|
1,947,175
|
|
910,021
|
|
1,785,418
|
Depreciation
|
419,500
|
|
835,104
|
|
417,998
|
|
833,222
|
|
460,821
|
|
913,052
|
|
448,822
|
|
893,489
|
Amortization
|
12,704
|
|
26,389
|
|
19,884
|
|
36,229
|
|
29,238
|
|
57,583
|
|
33,630
|
|
62,820
|
Others
|
536,325
|
|
1,096,795
|
|
544,798
|
|
1,083,852
|
|
585,304
|
|
1,180,331
|
|
555,729
|
|
1,122,148
|
|
6,182,886
|
|
12,011,795
|
|
5,649,846
|
|
10,919,670
|
|
7,125,034
|
|
13,821,122
|
|
6,246,360
|
|
12,088,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect
and direct logistics expenses
|
547,545
|
|
1,063,078
|
|
454,180
|
|
867,678
|
|
624,692
|
|
1,208,409
|
|
503,961
|
|
1,002,381
|
Marketing
|
86,606
|
|
203,672
|
|
133,615
|
|
221,640
|
|
136,138
|
|
290,233
|
|
198,023
|
|
337,448
|
Salaries
and employees benefits
|
267,851
|
|
517,086
|
|
258,731
|
|
508,602
|
|
353,584
|
|
671,734
|
|
319,209
|
|
631,950
|
Depreciation
|
37,740
|
|
68,621
|
|
23,923
|
|
49,861
|
|
57,533
|
|
111,113
|
|
45,376
|
|
89,795
|
Amortization
|
15,319
|
|
29,038
|
|
17,492
|
|
32,480
|
|
22,753
|
|
42,712
|
|
22,990
|
|
43,325
|
Others
|
102,720
|
|
208,853
|
|
99,504
|
|
207,675
|
|
166,189
|
|
321,022
|
|
167,218
|
|
287,173
|
|
1,057,781
|
|
2,090,348
|
|
987,445
|
|
1,887,936
|
|
1,360,889
|
|
2,645,223
|
|
1,256,777
|
|
2,392,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and employees benefits
|
50,540
|
|
90,720
|
|
42,902
|
|
85,282
|
|
85,617
|
|
155,839
|
|
72,505
|
|
142,882
|
Fees
|
17,350
|
|
29,213
|
|
7,954
|
|
14,215
|
|
17,350
|
|
29,213
|
|
7,954
|
|
14,215
|
Depreciation
|
8,172
|
|
14,483
|
|
4,123
|
|
8,698
|
|
12,130
|
|
21,627
|
|
6,203
|
|
12,305
|
Amortization
|
6,646
|
|
14,245
|
|
4,889
|
|
11,281
|
|
7,505
|
|
15,713
|
|
7,011
|
|
15,438
|
Others
|
39,901
|
|
61,229
|
|
25,885
|
|
57,957
|
|
67,863
|
|
110,633
|
|
42,484
|
|
92,546
|
|
122,609
|
|
209,890
|
|
85,753
|
|
177,433
|
|
190,465
|
|
333,025
|
|
136,157
|
|
277,386
|
|
(1)
|
Includes abnormal losses in the production chain.
|
The Company incurred in expenses
with internal research and development of new products of R$31,187 for the six-month period ended on June 30, 2020 in the parent
company and in the consolidated (R$31,516 in the parent company and in the consolidated in the same period of the previous year)
and R$14,872 in the parent company and in the consolidated for the three-month period ended on June 30, 2020 (R$16,851 in the parent
company and in the consolidated in the same period of the previous year).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
85
|
|
30.
|
RELATED PARTIES – PARENT COMPANY
|
In the normal course of business,
rights and obligations arise between related parties, resulting from transactions of sale and purchase of products, as well as
from financial operations.
The Company holds a Related
Parties Transactions Policy, which was reviewed and approved by the Board of Executive Officers and applies to all subsidiaries
of the group.
The policy mentioned above provides
the conditions that must be observed for the realization of a transaction between related parties, as well as establishes approval
hierarchies according to the value and nature of the transactions involved. The policy also foresees situations of conflict of
interests and how they must be conducted.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
86
|
|
30.1.
|
Transactions and balances
|
The balances of the transactions
with related parties registered in the statement of financial position of the Parent Company are as follows:
|
Accounts
receivable
|
|
Dividends
and interest on the shareholders' equity receivable
|
|
Loans
|
|
Trade
accounts payable
|
|
Other
rights
|
|
Advances
and other liabilities
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
06.30.20
|
|
12.31.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Al-Wafi
Food Products Factory LLC
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
30
|
|
-
|
|
(927)
|
Banvit
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
236
|
|
1,094
|
|
-
|
|
-
|
BRF
Energia S.A.
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(9,813)
|
|
(6,376)
|
|
-
|
|
-
|
|
-
|
|
-
|
BRF
Foods GmbH
|
849,134
|
|
833,062
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
BRF
Foods GmbH - Branch
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,296
|
|
(2,354)
|
|
(1,733)
|
BRF
Foods LLC
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
552
|
|
466
|
|
(2)
|
|
(2)
|
BRF
Global GmbH
|
4,859,603
|
|
3,843,949
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(7,142,683)
|
(1)
|
(4,049,636)
|
BRF
GmbH
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,830
|
|
1,520
|
|
(1,780,933)
|
(2)
|
(1,311,123)
|
BRF
Pet S.A.
|
2,091
|
|
800
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(37)
|
|
(16)
|
|
299
|
|
167
|
|
-
|
|
-
|
Establecimiento
Levino Zaccardi y Cia. S.A.
|
-
|
|
-
|
|
-
|
|
-
|
|
325
|
|
234
|
|
-
|
|
-
|
|
|
|
|
|
-
|
|
-
|
Federal
Foods Qatar
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(141)
|
FFM
Further
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
70
|
|
-
|
|
-
|
Highline
International Ltd.
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(7,351)
|
One
Foods Holdings
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
7,693
|
|
5,662
|
|
-
|
|
-
|
Perdigão
International Ltd.
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,117,287)
|
(1)
|
(905,550)
|
PSA
Laboratório Veterinário Ltda.
|
-
|
|
-
|
|
200
|
|
396
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sadia
Alimentos S.A.
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(10,266)
|
|
(11,159)
|
Sadia
Chile S.A.
|
160,128
|
|
99,095
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sadia
Uruguay S.A.
|
27,395
|
|
3,096
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(37,871)
|
|
(36,598)
|
VIP
S.A. Empreendimentos e Partic. Imob.
|
-
|
|
-
|
|
22
|
|
22
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total
|
5,898,351
|
|
4,780,002
|
|
222
|
|
418
|
|
325
|
|
234
|
|
(9,850)
|
|
(6,392)
|
|
10,610
|
|
10,305
|
|
(10,091,396)
|
|
(6,324,220)
|
|
(1)
|
The amount corresponds to export pre-payments, usual operation between
the productive units in Brazil with the wholly-owned subsidiaries that operate as trading companies in the international market.
|
|
(2)
|
Exercising its power as parent Company, BRF S.A. performs reimbursement
to certain subsidiaries for losses incurred in the normal course of their operations, generating liabilities recorded as Other
Obligations with Related Parties.
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
87
|
|
Revenue
|
|
Financial
results, net
|
|
Purchases
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
April
to June 2020
|
|
January
to June 2020
|
|
April
to June 2019
|
|
January
to June 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avex
S.A.
|
-
|
|
-
|
|
-
|
|
1,439
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
BRF
Energia S.A.
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(58,002)
|
|
(131,460)
|
|
(58,002)
|
|
(117,191)
|
BRF
Foods GmbH
|
47,582
|
|
93,362
|
|
56,769
|
|
118,497
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
BRF
Global GmbH
|
2,693,708
|
|
5,307,306
|
|
2,520,702
|
|
4,603,783
|
|
(82,774)
|
|
(147,907)
|
|
(23,152)
|
|
(48,050)
|
|
-
|
|
-
|
|
-
|
|
-
|
BRF
Pet S.A.
|
1,317
|
|
2,487
|
|
366
|
|
749
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(21)
|
|
(58)
|
|
(21)
|
|
(26)
|
Campo
Austral
|
-
|
|
-
|
|
-
|
|
1,448
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Establecimiento
Levino Zaccardi y Cia. S.A.
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
|
7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Perdigão
International Ltd.
|
-
|
|
-
|
|
-
|
|
-
|
|
(17,084)
|
|
(31,879)
|
|
(11,821)
|
|
(25,320)
|
|
-
|
|
-
|
|
-
|
|
-
|
Sadia
Alimentos S.A.
|
-
|
|
-
|
|
-
|
|
-
|
|
(166)
|
|
(361)
|
|
(731)
|
|
(731)
|
|
-
|
|
-
|
|
-
|
|
-
|
Sadia
Chile S.A.
|
46,936
|
|
79,518
|
|
18,139
|
|
30,170
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(46)
|
Sadia
Uruguay S.A.
|
11,270
|
|
20,713
|
|
9,793
|
|
19,991
|
|
(544)
|
|
(1,186)
|
|
(1,969)
|
|
(1,969)
|
|
-
|
|
-
|
|
-
|
|
-
|
Total
|
2,800,813
|
|
5,503,386
|
|
2,605,769
|
|
4,776,077
|
|
(100,564)
|
|
(181,326)
|
|
(37,673)
|
|
(76,070)
|
|
(58,023)
|
|
(131,518)
|
|
(58,023)
|
|
(117,263)
|
The subsidiaries of the Company enter into loan agreements pursuant its cash management strategy. As of June 30, 2020, the
balance of these transactions was R$2,497,871 (R$1,808,320 as of December 31, 2019) with a weighted average rate of 4.44% p.a.
(4.43% p.a. as of December 31, 2019).
|
30.2.
|
Other Related Parties
|
The
Company leased properties owned by BRF Previdência, for the six-month period ended on June 30, 2020, the total amount paid
as rent was R$9,764 (R$8,462 in the same period of the previous year)
for the three-month ended on June 30, 2020, the total amount paid as rent was of R$4,882 (R$4,231
in the same period of the previous year).
Due to the acquisition of biodigesters
from Instituto Sadia de Sustentabilidade, the Company has an outstanding payable to this entity of R$1,962 on June 30, 2020 (R$3,053
as of December 31, 2019) included in Other Liabilities.
The Company recorded a liability
in the amount of R$543 (R$844 as of December 31, 2019) related to the fair value of the guarantees offered to BNDES concerning
a loan made by Instituto Sadia de Sustentabilidade.
The Company is the guarantor
of loans related to a special program that aims the local development and were obtained by outgrowers in the central region of
Brazil. The proceeds of such loans are utilized by the outgrowers to improve farm conditions and will be paid by them in 10 years,
taking as collateral the land and equipment acquired through this program. The value of these guarantees on June 30, 2020 totaled
R$6,195 (R$12,949 as of December 31, 2019).
|
30.4.
|
Management remuneration
|
The total remuneration and benefits
expense with board members, statutory directors and the head of internal audit are set forth below:
|
Consolidated
|
|
April to June 2020
|
|
January to June 2020
|
|
April to June 2019
|
|
January to June 2019
|
Salary and profit sharing
|
23,638
|
|
35,605
|
|
12,752
|
|
22,722
|
Short term benefits (1)
|
1,492
|
|
1,611
|
|
114
|
|
131
|
Private pension
|
589
|
|
896
|
|
180
|
|
302
|
Post-employment benefits
|
-
|
|
-
|
|
-
|
|
47
|
Termination benefits
|
1,439
|
|
4,403
|
|
3,484
|
|
8,169
|
Share-based payment
|
4,360
|
|
8,394
|
|
2,155
|
|
3,983
|
|
31,518
|
|
50,909
|
|
18,685
|
|
35,354
|
|
(1)
|
Comprises: medical assistance, educational expenses and others.
|
In addition, the executive officers
received among remuneration and benefits the total amount of R$9,435 for the six-month period ended on June 30, 2020 (R$23,051
in the same period of the previous year) and R$4,835 for the three-month period ended on June 30, 2020 (R$9,230 in the same period
of the previous year).
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
88
|
In the normal course of the
business, the Company enters into agreements with third parties for the purchase of raw material, mainly corn and soymeal. The
agreed prices in these agreements can be fixed or variable. The Company also enters into other agreements, such as electricity
supply, packaging supplies, construction of buildings and others for the supply of its manufacturing activities. The firm commitments
schedule is set forth below:
|
Parent company
|
|
Consolidated
|
|
06.30.20
|
|
06.30.20
|
Current
|
4,809,544
|
|
5,123,497
|
Non-current
|
1,849,078
|
|
1,890,505
|
July to december 2021
|
617,655
|
|
634,736
|
2022
|
285,482
|
|
309,828
|
2023
|
200,098
|
|
200,098
|
2024
|
192,744
|
|
192,744
|
2025 onwards
|
553,099
|
|
553,099
|
|
6,658,622
|
|
7,014,002
|
|
32.
|
TRANSACTIONS THAT DO NOT INVOLVE CASH
|
The following transactions did
not involve cash or cash equivalents during the six-month period ended on June 30, 2020:
|
(i)
|
Capitalized loan interest: as referred in note 13.
|
|
(ii)
|
Addition of lease by right-of-use assets and respective lease liability: in the six-month period
ended on June 30, 2020, amounted to R$171,669 in the parent company and R$227,600 in the consolidated (R$2,174,821 in the parent
company and R$2,422,669 in the consolidated in the same period of the previous year) and in the three-month period ended on June
30, 2020, amounted to R$21,260 in the parent company and R$21,463 in the consolidated (R$10,091 in the parent company and R$17,541
in the consolidated in the same period of the previous year).
|
|
33.1.
|
Issuance of Debentures
|
On July 17, 2020, 2,200,000
(two million, two hundred thousand) Debentures were subscribed with a notional value of R$ 1,000.00 (one thousand Brazilian Reais),
in a total amount of R$2,200,000 (two billion and two hundred million Brazilian Reais), in two series as shown in the table below.
The Debentures are simple, not convertible into shares, unsecured and for private placement. The Debentures were privately placed
with VERT Companhia Securitizadora, to back its forty-sixth issuance of Agribusiness Receivables Certificates, in two series, which
were object of public distribution with restricted placement efforts.
Parent company and Consolidated
|
06.30.20
|
Operation
|
|
Series
|
|
Issue date
|
|
Maturity
|
|
Rate
|
|
Notional
|
|
|
|
|
|
|
|
|
|
|
|
Debenture - 2nd Issue
|
|
1st Series
|
|
07.14.20
|
|
07.14.27
|
|
IPCA + 5.30% p.a.
|
|
705,000
|
Debenture - 2nd Issue
|
|
2nd Series
|
|
07.14.20
|
|
07.12.30
|
|
IPCA + 5.60% p.a.
|
|
1,495,000
|
|
|
|
|
|
|
|
|
|
|
2,200,000
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
89
|
The issuance costs of R$75,275
will be recognized on the statement of income over the term of the debt according to the effective interest rate method.
This transaction is adherent
to the Company’s capital structure management strategy, which includes, among other aspects, the sustaining of liquidity,
the lengthening of the average tenor of its indebtedness, and the diversification of its sources of financing.
|
33.2.
|
Tender offer for Senior Notes
|
Between July 17 and July 24,
2020 the Company executed an offer to repurchase any and all outstanding (i) (a) 5.875% Senior Notes due 2022, (b) 2.750% Senior
Notes due 2022, (c) 3.950% Senior Notes due 2023; and (d) 4.750% Senior Notes due 2024 all issued by BRF; and (ii) 4.350% Senior
Notes due 2026, issued by BRF GmbH and guaranteed by BRF. The offer was conditioned on the aggregate amount of the repurchase price
of USD300,000 and the results are shown in the table below:
Instrument
|
|
Maturity
|
|
Notional repurchased
|
|
Outstanding notional (1)
|
|
|
(debt currency)
|
|
(Reais) (2)
|
|
(debt currency)
|
|
(Reais) (2)
|
|
|
|
|
|
|
|
|
|
|
|
BRF SA BRFSBZ2 - 5,875% - USD (3)
|
|
2022
|
|
27,190
|
|
141,086
|
|
82,122
|
|
426,123
|
BRF SA BRFSBZ3 - 3,950% - USD
|
|
2023
|
|
60,567
|
|
314,276
|
|
285,422
|
|
1,481,026
|
BRF SA BRFSBZ4 - 4,750% - USD
|
|
2024
|
|
64,144
|
|
332,837
|
|
453,714
|
|
2,354,277
|
BRF SA BRFSBZ5 - 2,750% - EUR
|
|
2022
|
|
119,061
|
|
723,355
|
|
205,720
|
|
1,249,852
|
|
(1)
|
Outstanding notional after the tender offer.
|
|
(2)
|
Represented by the amount in the original debt currency, translated
by the foreign exchange rate at the settlement date of the repurchase.
|
|
(3)
|
Loan fully designated as hedge accounting (note 24.4.2.ii). The exchange
rate variation between the designation date and the settlement date of the repurchased portion will remain in Other Comprehensive
Income until the realization of the highly probable sales (hedge object).
|
On July 27, 2020 and on July 28, 2020,
the Company paid the amount equivalent to R$1,554,850 for the repurchase of these liabilities, which includes notional, interest
and premium. The Company incurred in financial expenses with the repurchase in the amount of R$34,033 for the premium paid, R$5,998
with taxes and R$8,961 with the write-off of the costs of issuance.
|
33.3.
|
Prepayment of credit facilities
|
Additionally to the tender offer
described above, in July and August 2020, the Company prepaid certain bilateral credit facilities in Brasil with original maturity
between September 2020 and August 2021, in the aggregated notional and interest amount of R$1,593,176, being R$964,484 related
to the facilities described in note 1.4.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
90
|
|
34.
|
APPROVAL OF THE INTERIM FINANCIAL INFORMATION
|
The interim financial information
was approved and the issuance authorized by the Board of Directors on August 12, 2020.
BOARD OF DIRECTORS
|
|
|
|
Chairman (Independent)
|
Pedro Pullen Parente
|
Vice-Chairman (Independent)
|
Augusto Marques da Cruz Filho
|
Independent Member
|
Dan Ioschpe
|
Independent Member
|
Flavia Buarque de Almeida
|
Independent Member
|
Flavia Maria Bittencourt
|
Non-Independent Member
|
Ivandré Motiel da Silva
|
Independent Member
|
José Luiz Osório de Almeida Filho
|
Independent Member
|
Luiz Fernando Furlan
|
Independent Member
|
Marcelo Feriozzi Bacci
|
Independent Member
|
Roberto Rodrigues
|
|
|
FISCAL COUNCIL
|
|
|
|
Chairman
|
Attílio Guaspari
|
Member
|
Maria Paula Soares Aranha
|
Member
|
André Vicentini
|
|
|
AUDIT AND INTEGRITY COMMITTEE
|
|
|
|
Comittee Coordinator (Independent)
|
Augusto Marques da Cruz Filho
|
Non-Independent Member
|
Ivandré Motiel da Silva
|
Independent Member
|
Marcelo Feriozzi Bacci
|
External Member
|
Valmir Pedro Rossi
|
External Member
|
Jerônimo Antunes
|
|
|
BOARD OF EXECUTIVE OFFICERS
|
|
|
|
Global Chief Executive Officer
|
Lorival Nogueira Luz Júnior
|
Vice-President of Finance and Investor Relations
|
Carlos Alberto Bezerra de Moura
|
Vice-President of Operations and Procurement Officer
|
Vinícius Guimarães Barbosa
|
Vice-President of Commercial Brazil Market
|
Sidney Rogério Manzaro
|
Vice-President of Human Resources and Shared Services
|
Alessandro Rosa Bonorino
|
Vice-President of Strategy, Managing and Innovation
|
Rubens Fernandes Pereira
|
Vice-President of Quality and Sustainability
|
Neil Hamilton dos Guimarães Peixoto Jr.
|
Vice-President of Sales & Operations Planning and Supply Chain
|
Leonardo Campo Dallorto
|
|
|
|
|
|
|
Marcos Roberto Badollato
|
Joloir Nieblas Cavichini
|
Accounting Director
|
Accountant – CRC 1SP257406/O-5
|
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
91
|
COMENTARY ABOUT THE
COMPANY PROJECTIONS BEHAVIOUR
In the twelve-month period ended
December 31, 2019, Company's net leverage, as measured by the Net Debt / Adjusted EBITDA ratio, reached 2.50x.
The projections initially disclosed
on June 29, 2018 for the fiscal year ending December 31, 2019 were replaced on February 7, 2019, on June 3, 2019, on August 9,
2019 and finally on November 8, 2019. Following the completion of the Monetization Plan, the Company revised the net leverage guidance
indicator to approximately 2.75X at the end of 2019 and maintained its guidance of approximately 2.65x for 2020. On March
3, 2020 the Company revised the net leverage guidance to a range between 2.35 - 2.75x for the year 2020.
BREAKDOWN OF THE CAPITAL
BY OWNER (NOT REVIEWED)
The shareholding position of
the shareholders holders of more than 5% of the voting stock, management, members of the Board of Directors is presented below:
|
|
06.30.20
|
|
12.31.19
|
Shareholders
|
|
Quantity
|
|
%
|
|
Quantity
|
|
%
|
Major shareholders
|
|
|
|
|
|
|
|
|
Fundação Petrobras de Seguridade Social - Petros (1)
|
|
92,716,266
|
|
11.41
|
|
92,716,266
|
|
11.41
|
Caixa de Previd. dos Func. do Banco do Brasil (1)
|
|
76,290,652
|
|
9.39
|
|
76,974,752
|
|
9.47
|
Management
|
|
|
|
|
|
|
|
|
Board of Directors
|
|
6,596,580
|
|
0.81
|
|
6,474,420
|
|
0.80
|
Executives
|
|
355,643
|
|
0.04
|
|
236,338
|
|
0.03
|
Treasury shares
|
|
5,310,626
|
|
0.65
|
|
713,446
|
|
0.09
|
Other
|
|
631,203,479
|
|
77.70
|
|
635,358,024
|
|
78.20
|
|
|
812,473,246
|
|
100.00
|
|
812,473,246
|
|
100.00
|
|
(1)
|
The pension funds are controlled by employees that participate in
the respective companies.
|
The Company is bound to arbitration
in the Market Arbitration Chamber, as established by the arbitration clause in the by-laws.
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
92
|
INDEPENDENT AUDITOR’S
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
To the Board of Directors and
Shareholders of
BRF S.A.
Itajaí - SC
Introduction
We have reviewed the accompanying individual
and consolidated interim financial information of BRF S.A. (“Company”) contained in the Quarterly Information Form
- ITR for the quarter ended June 30, 2020, which comprises the statement of financial position as of June 30, 2020 and the respective
statements of income (loss) and comprehensive income (loss) for the three and six-month period then ended and changes in equity
and cash flows for the six-month period then ended, including the explanatory notes.
The Company's management is responsible
for the preparation of this individual and consolidated interim financial information in accordance with Technical Pronouncement
CPC 21 (R1) and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as
for the presentation of this information in accordance with standards issued by Comissão de Valores Mobiliários,
applicable to the preparation of Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial
information based on our review.
Scope of review
We conducted our review in accordance with
the Brazilian and International standards on review engagements of interim financial information (NBC TR 2410 – Revisão
de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial
Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists
of making inquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in accordance with the auditing standards and,
consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion.
Conclusion on the individual and consolidated
interim financial information
Based on our review, nothing has come to
our attention that causes us to believe that the accompanying individual and consolidated interim financial information included
in the Quarterly Information referred to above has not been prepared, in all material respects, in accordance with CPC 21 (R1)
and IAS 34, issued by IASB, applicable to the preparation of Quarterly Information - ITR, and presented in accordance with the
standards issued by Comissão de Valores Mobiliários.
Emphasis of matter
We draw attention to explanatory note 1.2
to the individual and consolidated interim financial information, which describe the investigations involving the Company, as well
as their current and potential developments. In the current stage of the investigations, it is not possible to determine the potential
financial and non-financial impacts on the Company resulting from them and of their potential developments and, consequently, to
record potential losses which could have a material adverse effect on the Company´s financial position, results of operations
and cash flows in the future. Our conclusion is not modified in respect to this matter.
Other matters - Statements of Value Added
The individual and consolidated interim
financial information related to statements of value added (DVA) for the six-month period ended June 30, 2020, prepared under the
responsibility of the Company's management, presented herein as supplementary information for IAS 34 purposes, have been subject
to review procedures jointly performed with the review of the Quarterly Information - ITR of the Company. In order to form our
conclusion, we assessed whether those statements are reconciled with the interim financial information and accounting records,
as applicable, and whether their format and contents are in accordance with the criteria determined in the Technical Pronouncement
CPC 09 - Demonstração do Valor Adicionado. Based on our review, nothing has come to our attention that causes
us to believe that the statements of value added above referred were not prepared, in all material respects, consistently with
the overall individual and consolidated interim financial information.
São Paulo, August 12, 2020
KPMG Auditores Independentes
CRC 2SP014428/O-6
Original report in Portuguese signed by
Fabian Junqueira Sousa
Accountant CRC 1SP235639/O-0
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
93
|
OPINION OF THE AUDIT
AND INTEGRITY COMMITTEE
The Audit and Integrity Committee of BRF
S.A., in fulfilling its statutory and legal duties, reviewed:
|
(i)
|
the interim financial information (parent company and consolidated) for the six-month period ended
on June 30, 2020;
|
|
(ii)
|
the Management Report; and
|
|
(iii)
|
the review report issued without modification by KPMG Auditores Independentes.
|
Based on the documents reviewed and on
the explanations provided, the members of the Audit and Integrity Committee, undersigned, issued an opinion for the approval of
the interim financial information for the six-month period ended on June 30,2020.
São Paulo, August 12, 2020.
Augusto Marques da Cruz Filho
Coordinator (Independent)
Ivandré Motiel da Silva
Non-Independent member
Marcelo Feriozzi Bacci
Independent member
Valmir Pedro Rossi
External member
Jerônimo Antunes
External member
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
94
|
STATEMENT OF EXECUTIVE
BOARD ON THE INTERIM FINANCIAL INFORMATION AND INDEPENDENT AUDITOR’S REPORT
In compliance with the dispositions of
sections V and VI of article 25 of CVM Instruction No. 480/09, the executive board of BRF S.A., states:
|
(i)
|
reviewed, discussed and agreed with the Company's interim financial information for the six-month
period ended on June 30, 2020, and
|
|
(ii)
|
reviewed, discussed and agreed with conclusions expressed in the review report issued by KPMG Auditores
Independentes for the Company's interim financial information for the six-month period ended on June 30, 2020.
|
São Paulo, August 12, 2020.
Lorival Nogueira Luz Júnior
Global Chief Executive Officer
Carlos Alberto Bezerra de Moura
Vice President of Finance and Investor
Relations
Vinícius Guimarães Barbosa
Vice-President of Operations and Procurement
Officer
Sidney Rogério Manzaro
Vice-President of Commercial Brazil Market
Alessandro Rosa Bonorino
Vice-President of Human Resources and Shared
Services
Rubens Fernandes Pereira
Vice-President of Strategy, Managing and
Innovation
Neil Hamilton dos Guimarães Peixoto
Jr.
Vice-President of Quality and Sustainability
Leonardo Campo Dallorto
Vice-President of Sales & Operations
Planning and Supply Chain
BRF S.A. | INTERIM FINANCIAL INFORMATION - June 30, 2020
|
95
|