MBRF Q3 2026 Earnings Call - Net Income Surges 123.5% as U.S. Beef Turns and BRF Delivers Record Value-Added Profitability

Moderator: Good morning, ladies and gentlemen. Welcome to MBRF’s third quarter 2026 earnings call. Today’s call is being recorded, and a replay will be posted on the company’s website at ri.mbrf.com. You can also download the slides there. All participants are currently in listen-only mode. We will then open the call up for questions with further instructions at that time. Before we get going, let me remind you that forward-looking statements rest on what MBRF’s management believes and expects, and on the information the company has at hand today. Because they deal with what lies ahead, these statements carry risks and uncertainties, and they hinge on circumstances that may or may not play out. Investors, analysts, and members of the press should keep in mind that swings in the broader economy, in our industry, and other factors could cause results to differ materially from what those statements point to.

Miguel Gularte, CEO, MBRF: Joining us today are Mr. Miguel Gularte, CEO, Mr. Tim Klein, Chief Executive Officer of National Beef, and José Ignácio Scoseria Rey, our CFO. I would like to turn the call over now to Mr. Miguel Gularte, who will kick off the presentation. Please go ahead, sir. Welcome to MBRF’s Q3 earnings presentation. In the quarter, we moved our strategy forward on two fronts: diversifying markets and broadening our high value-added portfolio with operational efficiency and disciplined execution. Net revenue came to BRL 41.4 billion, while adjusted EBITDA reached BRL 3.6 billion, with a margin of 8.6%. Net income was BRL 210 million, up 123.5% on the same quarter last year. The results we are presenting this quarter show the company’s ability to perform across different business environments, capturing opportunities and creating value. To take you through the third quarter in the detail, I will now turn it over to our CFO, Mr. José Ignácio Scoseria Rey.

José Ignácio Scoseria Rey, CFO, MBRF: I will come back afterwards for the closing remarks. Good morning, everyone. I will now go through our consolidated results for the third quarter of 2026, covering Beef North America, Beef South America, and BRF. Let me highlight the following for this third quarter. We reported BRL 41.4 billion in consolidated net revenue. In U.S. dollars, that is 5% growth in net revenue over the third quarter of last year. Consolidated adjusted EBITDA came to BRL 3.6 billion, with a consolidated margin of 8.6%. Net income was BRL 210 million for the quarter. Free cash flow was positive at BRL 295 million. And finally, we closed the quarter with leverage of 3.40 times LTM EBITDA. On the next slide, we show how volume, net revenue, and EBITDA moved both in total and by segment year-over-year.

Adjusted EBITDA grew 1.6%, with the margin up 0.2 percentage point, while net revenue was down slightly by 0.8% against the same quarter of last year. Beef North America accounted for 46% of reported revenue in the period, BRF for 39%, and Beef South America for 15%. Adjusted EBITDA was BRL 3.6 billion, with an 8.6% margin, of which BRF made up 71%, South America 18%, and North America 11%. To underscore the company’s geographic spread and multi-protein portfolio, here is the revenue breakdown. 45% comes from the U.S., 24% from Brazil, and the rest is spread mainly across Asia and the Middle East, with 38% of sales volume coming from processed value-added products. On the currency side, 73% of our consolidated revenue was generated in U.S. dollars, only 24% in reals, and the remainder in other currencies. We will now turn to performance by business segment.

I’ll hand it over to Tim Klein, who will take you through the Beef North America results.

Tim Klein, Chief Executive Officer of National Beef, National Beef/MBRF: Thank you, Ignácio. Let’s turn to slide six, where I’ll walk through our third quarter results. Starting with the chart on the left, sales volume increased 1.9% compared to the same quarter last year. This compares favorably with an industry slaughter decline of approximately 6%, reflecting the continued tightening of finished cattle supplies. Favorable fed cattle prices relative to feed costs, combined with elevated replacement cattle prices, continued to provide incentives for cattle feeders to keep cattle on feed longer and take them to heavier weights. Net sales totaled $3.7 billion, an increase of 2.3% compared to the prior year. EBITDA was $77 million, up 4.6% from last year, with an EBITDA margin of 2.1%. While boxed beef prices increased year-over-year, those increases were not enough to fully offset the continued rise in cattle costs.

Now let’s move to slide seven and take a look at the U.S. market. Starting with the chart on the left, USDA reported live cattle prices averaged $231 per hundredweight, down 3.6% from the prior year. The USDA comprehensive cutout averaged $377 per hundredweight, a decrease of 2.5%, while drop credit increased 23.3% to an average of $14.49 per hundredweight. The USDA cutout ratio was 1.63 compared to 1.61 in the same quarter last year. As we expected, fed cattle supplies remained meaningfully below year-ago levels and were generally in line with where we expected them to be at this point in the cattle cycle. The impact of tighter cattle supplies has been partially offset by the reduction in industry processing capacity from recent plant closures. This has helped bring the industry closer to balance and has created a more favorable margin environment.

We continue to be encouraged by the underlying strength of beef demand. Consumers have remained resilient despite historically high beef prices, and we believe those fundamentals will continue to support the industry as we move through this phase of the cattle cycle. Looking ahead, we expect the fourth quarter to be stronger than the third quarter. More importantly, we continue to believe that industry fundamentals are moving in the right direction and that 2027 has the potential to deliver better margins in 2026. We feel good about where we are positioned as we move into the next phase of the cattle cycle. With that, I’ll turn the call back over to Ignácio.

José Ignácio Scoseria Rey, CFO, MBRF: Thank you, Tim. Let’s move to slide eight now, where we lay out how our South America operations performed in Q3 2026. Let me start with the chart on the left. Volume came in at 257,000 tons in the quarter, down 11.7% from the same period of 2025, a smaller decline than the industry as a whole. Moving to the chart in the middle, net revenue reached BRL 6.2 billion, 9% of net revenue above the Q3 of 2025. On the chart to the right, adjusted EBITDA came in at BRL 647 million, up 3% versus EBITDA from the same period last year. That gives us an EBITDA margin of 10.5%. This performance reflects how resilient the business is, supported by diversified production platforms and export destinations, and by a stronger showing in processed products.

Up next, on the left, we break revenue down by origin, which underscores how diversified the company footprint really is. On the right, we show export sales, which made up 57% of the operation’s total revenue in Q3 of this year. Sales to North America now account for 33% of export revenue, up from 24% in Q2. Given today’s environment, it’s worth pointing out that our exports to the U.S. benefit from the logistics and the reach of National Beef’s commercial platform. Slide 10 shows the results of the BRF operation. In the third quarter of this year, strong demand drove record exports volumes, and in the domestic market, consistent commercial execution delivered sequential growth in volumes sold. Starting with the chart on the left, volume was 1.3 million tons in the quarter, down 1.9% from the same quarter last year.

Net revenue was BRL 16.1 billion for the period, down 1% from Q3 of 2025. We reported BRL 2.6 billion in EBITDA, with a healthy margin of 15.9%, up 40 basis points versus Q3 of last year. We highlight now sequential growth of 5.3% in domestic volume sold, helped by an increase both in the number of customers served and in items sold. We’d also point out that Sadia and Perdigão ranked first and second among the brands consumers loved most in the meat and meat products category in Brazil, according to the 2026 Ecglobal Net Love Score. Backing our holiday season campaigning, we broadened the portfolio with the launch of high-value-added products. In export markets, we further widened our options with 17 new export licenses secured in the quarter, notably in the Americas, the Middle East, and the EU.

In China, we moved ahead with the ramp-up of the Henan plant, which hit its highest production volume in September, backed by partnerships with global and local food service chains. We continue to advance our innovation strategy and our focus on value-added products, resuming sales of processed products to the U.K. and posting record volumes of breaded products in the Southern Cone. Slide 12 brings the results of Sadia Halal, one of the largest halal protein production and distribution platforms in the world. In Q3, on a pro forma basis, Sadia Halal posted record revenue of $621 million, up 9.7%, with an adjusted EBITDA margin of 13.1%, 210 basis points higher than the same period of 2025. Over the last 12 months, adjusted EBITDA reached $333 million.

We posted our highest volume of 2026, driven by record output of processed products in our Kizad plant in the U.A.E. and our Dammam plant in Saudi Arabia. Page three highlights an important achievement in the period. You can see that selling expenses in absolute terms grew below inflation, even absorbing the pressure on freight, and that admin expenses through 2026 came down 7% year-on-year and 12.2% year-to-date, evidence of the scale and efficiency gains from the merger. That reduction helped keep selling, general, and admin expenses flat. Slide 14 sets out free cash flow. The bridge shows operating cash generation of BRL 3.2 billion. CapEx in the period came in at BRL 1.5 billion. Financial expenses totaled BRL 1.4 billion, leaving positive free cash flow of BRL 295 million. Now, consolidated net debt at the end of Q3 of this year.

We reported net debt of BRL 45.7 billion, up 1.6% from the second quarter, with leverage at 3.45 times. Excluding the share buybacks in the quarter, leverage would have been 3.43 times. Let me stress that we remain focused on the company’s capital structure. We will go through our liability management initiatives on the next slide. These are the company’s liability management initiatives on slide 16. Over the quarter, we cut BRL 3.8 billion from debt maturing in 2026 and 2027. On top of that, after the quarter closed, we refinanced an additional $1 billion, cutting our 2026 and 2027 maturities even further. Taking these initiatives into account on a pro forma basis, debt maturing in 2026 and 2027 is down 41% from the second quarter to BRL 11.8 billion. As a result, the average maturity extends from 5 to 5.2 years.

We are pressing ahead with initiatives to reduce short-term portion and lengthen the average maturity of the company’s debt. Page 17 brings the highlights and the progress on our ESG agenda. 100% compliant with the Federal Public Prosecutor’s Office audit that assesses social and environmental criteria across the cattle supply chain. First place in the food and beverage category at the Leaders League Compliance Summit & Awards Brazil 2026, one of the country’s leading awards for ethics and integrity programs. Full environmental offsetting of the packaging for 2026 Christmas Kits in partnership with eureciclo. Gold in the technology category of the 2026 ABRE Packaging Award for the Qualy Vegê Bio Circular Tub, made from renewable raw material derived from post-consumer cooking oil. Thank you. I will now hand the call over to our CEO for his closing remarks.

Miguel Gularte, CEO, MBRF: Thank you, Renato. I would like to close by highlighting what we see as the key drivers of our progress this quarter. First, profitability in our Beef North America operation continues to improve steadily. This was the best quarter in two years, reflecting the capacity adjustments across the industry and National Beef’s competitive edge in the region. In South America, we delivered consistent results, underpinned by market diversification, commercial flexibility, and by going after the best business opportunities available. In value-added products, we posted record profitability in Brazil and in Argentina. The feedlot operation in Brazil and our access to National Beef sales and distribution platform both added to the segment’s performance. At BRF, domestic volume grew sequentially, which speaks to the strength of our disciplined commercial execution. We also broadened our festive portfolio of Sadia and Perdigão, top-of-mind brands when it comes to Christmas dinners and special poultry.

That recognition reinforces a bond built over generations, one that keeps our brands among Brazilians’ first choices when they celebrate. In export markets, we posted record sales volume. We also made headway in higher value-added products with record output at our plants in the Middle East and in China. We continue to make progress on efficiency and synergies as well. The MBRF+ program captured BRL 500 million in the period, and the merger synergy initiatives added up to BRL 179 million. To wrap up, let me stress that we’re staying on course for our business strategy, expanding and innovating in higher added value products and diversifying geographies. That’s how we’ll keep earning a bigger place at the table of millions of consumers around the world.

None of this would be possible without the essential direction of our Chairman and controlling shareholder, Marcos Molina, who pushes us to keep improving, and without more than 130,000 employees who give their best to MBRF every day. We also thank our shareholders and the board of directors for their continued support to our customers, integrated producers, our suppliers, and the communities where we operate. Thank you very much. We now begin our Q&A session. If you wish to ask a question, please raise your hand. If your question has been answered, you can leave the queue clicking once again the same button. Wait while we collect the question.

Q&A Moderator, MBRF: Renata Cabral asks the first question. You can ask your question now, please. Good morning. Thank you for taking my question, and congratulations on the results. My first question is about El Niño. Can you give us an update on the grains strategy for 2027? You’ve been talking about extending your grain positions in your contracts, so I’d like to have a better grasp of what the company’s planning to do as to its needs on soybeans and corn, and how much can you be protected? Then I’ll ask my second question. Good morning, Renata. Let me address the El Niño question. When we look back to the last major El Niño, 2016, 2017, there were disruptions. There was a delay in planting soybeans, and that ended up impacting corn as well.

José Ignácio Scoseria Rey, CFO, MBRF: There was a major shift in climate expectations after April, which there was a major drought. The way we see things this year, it looks somewhat different from what we had in 2016 and 2017. Weather conditions remain very normal up to now. So the first risk that I mentioned before has been properly mitigated. However, we keep monitoring rainfall forecast for next year, especially for the double-crop corn. The summer crop, it’s going to be great. We do not expect any major impacts whatsoever. That will be about 30 million tons. So we keep on monitoring weather forecasts. Maps have been showing normal conditions up to now. Of course, there’s some level of uncertainty there. On our side now, we maintain the same policy we mentioned in the previous call.

We are extending or elongating our positions using the available tools, term contracts, be them buying and storing in-house or maybe using some derivatives. We are now getting to the double-crop 2027 for corn, as well as soy meal. That is up to Q2. Again, we maintain the same strategy. We are now hedging prices for the first half of next year, and we keep monitoring the weather forecast. Up until now, it is a little better than what we expected a couple of months ago.

Thank you very much. My second question also goes to you on cash generation. As a follow-up to what you mentioned in our second quarter earnings call, the possibility to reduce CapEx in 2027 from 3.4 to 4. Are you still comfortable with that range? In Q3, we saw an improvement in cash generation, and I would like to understand the potential that still exists to release working capital, especially normalizing inventories and the logistics in the Middle East, and other opportunities looking into 2027. As far as our CapEx is concerned, we maintain what we said in the past two earnings calls. In 2025, the company was generating BRL 1.5 billion per quarter, which gives us an annualized CapEx of BRL 6 billion.

In the first nine months of the year, we reduced to an average of BRL 1.35 billion, so BRL 4.1 billion in the first nine months, which would give us about BRL 5.3 billion, BRL 5.4 billion for the entire year. I would like to emphasize that the number for Q3 includes roughly BRL 350 million of expansion projects that are being financed. If we normalize, if we exclude that project that we are concluding at the Dammam plant, that number comes to BRL 1 billion or BRL 1.1 billion. That number of BRL 1.1 billion per quarter is what we expect for 2027. We are trying to be selective in the expansion projects we are approving. We have a challenge and a commitment, as we mentioned in previous calls, to reduce that CapEx in at least BRL 1 billion for next year. We are confident that we will deliver that.

In terms of working capital, true, in previous calls, we spoke about returning the working capital we had consumed. In Q3, we were able to neutralize working capital, so it is neutral, with seasonal and traditional pressure on inventories because of the holiday season and increase in the inventory of grains because of corn as a second crop, extra traditional in Q3. As for the outlook, we are confident that for Q4, the dynamics should improve. We should deliver positive variation in our working capital. I am not going to give you the precise number. Obviously, we depend on external factors like the war. It has an impact on 50,000 tons in our inventory that we have been carrying since Q1, accounting for BRL 200 million, roughly. That is an exogenous factor we have no control over.

Everything else that we control should move towards a positive direction, and I’m confident that we will have a positive performance in Q4. Perfect, Ignácio. Thank you very much for your answer.

Leonardo Alencar, Analyst, XP: Leonardo Alencar from XP is up next. You may go ahead, sir. Good morning, Ignácio. Good morning, everyone. I’d like your help, Miguel, to run an exercise. We know there are many moving parts in 2026. We had the Newcastle problem in Santa Catarina. There are restrictions for pork exports to the Philippines. There was export restrictions of poultry to EU, everything happening in the second half of the year. We’ve been talking about poultry production increase throughout the year, right? Above expectations, putting some additional pressure for some players. There are other proteins that are giving beef more competitiveness, right? How would these variables play out in 2027, Miguel? Can you elaborate on that? Maybe replacing part of the beef would be positive. What’s your read of the 2027 for the whole industry? It’s not guidance, I know.

Miguel Gularte, CEO, MBRF: Good morning.

Let me break down that answer. Let me first address the Newcastle issue. Unlike 2024, the problem now in 2026 is very different in nature. Brazil has learned its lesson. The Ministry of Agriculture is way more agile. Information flow is much better. This time around, restrictions disappeared. That was only concentrated in the state, and even so, it’s only a radius, not for the entire state. If you take the top 20 importers or exporters in Brazil, in Santa Catarina, 60% of them are now following the radius, and the others are maintaining the entire state, which is a major progress when compared to 2024. What we have seen so far, therefore, led us to believe that this is going to be concluded sooner than 2024. Everyone is working hard in that direction, and we are making progress. Now, onto the Philippines and the safeguards.

Let me focus on our company only. As far as MBRF is concerned, if I take the entire company, it represents 0.8%. BRF is 1.3% of the volume. If I take exports for the company, only 2.9% of the volume. This is happening because we worked diligently to open up other markets. This company is exporting to over 127 countries now. Looking ahead about cattle or beef cattle in general, excluding these one-off events, we still have a balanced market between supply and demand. If this balance holds true, it is very clear to us, demand will remain constant and supply is going to be smaller in Brazil. But in the case of MBRF, we have Uruguay ramping up its production, record births in Uruguay, and also an increase in production in Argentina.

These are the only two countries in which there is a growing trend, so we are very well positioned given our geographic position. In the case of poultry and pork, that balance will come out. China has had 36 million animals there in China, and we are mitigating the Philippines effect by doing so. Even with some depreciation of pork prices in international markets, poultry demand remains resilient and no major changes on our radar. In the case of beef, international markets will be boosted by the U.S. dollar. The currency will be playing a relevant role, and Ignácio will be quantifying that. But the market has a lot of demand with less supply globally, and that demand or that international demand would bring consumption down, but we haven’t detected it so far.

By combining all these variables, I’m not giving you any guidance, 2027 is expected to be a well-balanced year and a very positive year. We are heading the right direction. As a company, we are working to make that happen. We have good quality information, which allows us to make good decisions, and by doing so, if there are any price weaknesses, we can extend our portfolio. If the opposite occurs, we shorten the portfolio. We’ve been doing that time and time again for the three proteins in different geographies, and nothing very different is expected to happen. We’ll keep on working hard, of course, by working with the feedlot numbers above 20%-25% of our demand. We managed to purchase these heads at very attractive prices. Corn prices remain attractive, so we have managed to extract a synergy, our own feedlots and slaughter volumes.

José Ignácio Scoseria Rey, CFO, MBRF: That has been working out fine for us, and we’ll keep on working in that direction. I think Ignácio can add some color to my comments. Hi, Leonardo. Good morning. As to the competitiveness that Brazil will have once you have a more depreciated FX, well, let me address from our specific point of view. If you take into account the impact of the real depreciation when converting National Beef and BRF’s businesses, let me exclude Beef South America, because the cattle is related to dollar prices. Just National Beef and BRF conversion, 10 cents to the dollar can yield BRL 200 million in results, and almost 90% is cash, because that’s a very small weight in our accounting. BRL 200 million in EBITDA and cash flow, that’s every 10 cents of appreciation.

Again, that competitiveness that we will have with a depreciated exchange rate makes us feel confident as to the market conditions for next year. Thank you. That was very clear.

Our next question, Lucas Mussi from JP Morgan. Over to you. Good morning. I have a question on processed food in Brazil. Looking at ABRAS and Nielsen data, October was a better month, perhaps because of the elections. How do you see November and the expectation for the end of the year? We saw some prices picking up for pork and also poultry. Does that translate into better prices for processed food? I know it is hard to say, but for next year, for the two markets, processed food and poultry, you have a small exposure of poultry in the domestic market. How do you see the industry if you see the industry more balanced supply-wise? Both markets seem to have more supply than demand. That has put pressure on prices.

Do you believe you will have more controlled supply for 2027, which might help prices of processed food in Brazil? As for the consumption of processed food, what we have seen this year is that compared to 2025, the year was a little less dynamic. Year-on-year, in the first three quarters, we had a drop in volume. In Q3, although it is better, it is not performing at the same level of Q3 2025. What we observed during the year, and we mentioned that in previous calls, is that in 2026, there has been a constant increase quarter-on-quarter. If we look at our volume of processed foods, there was an expansion of about 2% compared to Q2, and we are confident that in Q4, we will deliver yet another expansion closer to the volume that we delivered last year.

Again, in a market that is clearly a little less dynamic than last year, we see an improvement quarter after quarter, and I believe that the latest retail data shows that. As for prices, as you mentioned, Q3 was the most challenging moment of the year. The price of fresh protein, both poultry and pork, reached the lowest levels in Q3, and that presented a challenge to price our processed foods. We already see an improvement for fresh products in this quarter. Both pork and poultry started improving going into Q4. We are optimistic that we will be able to change that trend and start better pricing our portfolio of processed food for next year. There is an expectation of drop in pork, especially in China, so there should be a price recovery going into next year.

Poultry, with increased supply at lower levels than this year, it is the only protein that is likely to grow, but at a smaller pace than this year. There are uncertainties in Brazil in terms of how the market will perform. The increased supply this year of 2.5% in placements is the cap. There is a challenge for next year in the industry, mainly in terms of the impact of the new work week impact, from six days a week to five days a week. We see a greater balance between supply and demand, so we are optimistic as far as that is concerned. Thank you, Ignácio.

Laura Hirata, Analyst, Santander: Laura Hirata from Santander asks the next question. You may go ahead, ma’am. Thank you for taking my question. Let me explore a couple of points. Number one, Beef South America. The reported margin was very substantial. That came as a surprise to us. Can you explain why, or the main drivers were? More boxed products in the mix, larger volume in confinements, and what can we expect ahead? My second question is about US Beef North America operations. I would like to better understand when you combine all the variables, based on recent variables, capacity, building, importing domestic beef or cattle, or were there operational improvements? What were the main drivers for these better margins, and what can we expect for the coming year? I would like to ask Tim to answer the second question first. Tim, please answer Laura’s question, if you can.

Tim Klein, Chief Executive Officer of National Beef, National Beef/MBRF: Yes. The three main drivers of profitability in Q3 are, number one, the capacity reduction across the industry with the plant closures provided a much better balance between the supply of cattle and the processing capacity. That was a huge factor, allowing plants to run at a higher utilization rate than we have. The Mexico reopening, cattle coming across, that is really not going to affect us until we get into the middle of 2027. Underlying all that is beef demand has been very, very strong and very resilient, even at the higher price levels. We have been able to manage a better comprehensive cutout value. In terms of what we are doing internally, as you know, we have spent significant CapEx to expand our value-add capability in our Liberal plant, and we are realizing some of those value-added opportunities going forward, and that will continue as we go through next year.

In terms of the outlook for 2027, as I said before, we expect that industry fundamentals will be more favorable, and we would expect to have a better 2027 than 2026.

José Ignácio Scoseria Rey, CFO, MBRF: Thank you, Tim. Laura, on to your question about South America. There are four main drivers behind results of Q3. Number 1, the pricing scenario across the board, except for China, both domestic markets at good price levels for the carcasses, as well as in alternative markets. The U.S. and other markets maintained good prices. The U.S. stands out using its platform to have a better reach to our customers. So, price levels were very attractive across the board, excluding China, as I said. Number 2, we had some shipments to China towards the end of the quarter. Of course, based on the arroba prices, there was good profitability. Again, that also contributed to the results. Number 3, and a major achievement, was the boxed products performance. The Chinese market remained closed.

It is usually you export raw materials at very attractive prices, and we could not profit from the hamburgers products, both in Brazil and Argentina. 50% of processed products are here. So we managed to get that record profitability in our processed portfolio. The fourth driver, confinement. On top of the usual contribution to maintain our plants at full capacity. In this quarter, and taking into account fed cattle and corn prices throughout the year, confinement or the confinement portion delivered good results. In sum, these were the main drivers. We focused on in Brazil, but a third of our business is Argentina with the exports to the U.S. Performance was very good there too. So that diversification of platforms played an important role for this quarter’s results.

Thiago, Analyst, BTG: Thank you very much. Thank you very much for the opportunity, and congratulations on the consistent results. Ignácio, I would like to explore the balance, which is one of the main concerns investors have moving forward. I have two questions. I am going to ask the first, and then I will come back for the second. The liability management slide was very helpful. It helps us have more visibility. But I would like to pick on your brain about your maturities that are still pending for the next 12 months. How much of that is in BRL, the average cost of that debt, and your appetite to extend that in dollars at a better cost? That is the first question. A mix of currency and the cost in a year as compared to the current situation. Good morning, Thiago.

José Ignácio Scoseria Rey, CFO, MBRF: The first point I would like to mention, what we presented so far, and work has not been concluded yet, we will advance in other initiatives by year-end. We expect those 11.8 that we posted will come to below BRL 10 billion or BRL 9 billion, between BRL 9 billion and BRL 10 billion until year-end. There are some ongoing operations that should contribute to reduce that short-term maturity even further. As far as cost is concerned, the refinancing presented on that slide, that was done with a spread reduction. We do not see a cost increase mainly for the dollar-denominated debt. We are obtaining smaller spreads in that refinancing. The maturity for next year, it is a mix between dollars and BRL in our plan looking forward. In the past three years, we are moving towards a profile of our debt in BRL, and that is only natural.

It was the consequence of having smaller flows of dollars at National Beef. We corrected when we created a natural hedge with National Beef reverting the trend, delivering a higher dollarized flow. Our trend is to start migrating again to more dollarized situations, reducing the debt in BRL. The new operations we are working on that we are likely to announce by year-end go to that direction. I would like to remind you that we also have the revolving credit in the U.S., which gives us some comfort. This is a part of the work done. We still have a lot to do until the end of the year, both in terms of the maturity of our debt in the short term and the opportunity to reduce our cost. I believe we will be able to answer your question with concrete activities by year-end. Great, Ignácio.

Thiago, Analyst, BTG: Thank you very much. My second question goes to cash generation and working capital. The use of instruments for cash management. That generates a lot of discussions with some volatility from quarter to quarter, more than the evolution in the quarter. How do you manage the use of those instruments? I would like to understand your exposure to those instruments in a scenario where the interest rate will remain higher for longer.

José Ignácio Scoseria Rey, CFO, MBRF: That is a very good question, Thiago. Both these lines, they are not used by the company to manage its working capital. These lines, or using more of it or not, that will depend on the supplier’s demand. Let me give you a good example. We reduced that by BRL 50 million for reverse factoring. There were quarters in which the supplier line and reverse factoring was down, so that is a direct consequence of the customer’s demand, if they want to discount our bonds. That will depend on customers’ demand, again. We offer these lines to consumers when we control them. So reverse factoring is not a tool to manage our working capital. It is a tool to make customers loyal to us and give them some financial flexibility.

As the different quarters play out, the differences between Q2 and Q3, consumers line moved in one direction and the reverse factoring to the opposite direction. Again, these are not accounts that will move hand-in-hand. As to customers, we had more now for the quarter. We had a drop in the first two quarters of the year. That will depend on market exposure, FX, that will depend on the different negotiations, especially in the case of our exports. There will be variations, undoubtedly, but we do not see that again as a tool to manage working capital. This is how the business plays out, and that depends on the demands coming from our partners. That was very clear, Ignácio. Thank you.

Thiago, Analyst, BTG: Our next question comes from Thiago from BTG. Hello. Good morning, everyone. Thank you for the opportunity. Ignácio just clarified something important on the working capital. That was one of my questions. As a follow-up question, that applies both to the previous quarter and to this quarter. When we look at other operational revenues, it was an important contribution in both quarters, and it is unclear where that value applies to when you reconcile EBITDA to adjusted EBITDA. There are other operational expenses that have been adjusted, but they do not refer to the total amount. Apparently, that value is mainly at BRF. If you could give us some color on that, Ignácio.

José Ignácio Scoseria Rey, CFO, MBRF: Thiago, sure. The nature of that impact on other revenues sources, it is basically tax-based. It is PIS and COFINS credits. One is extemporaneous from other periods, and another part is from this year. We revised certain credits for PIS and COFINS because of the tax reform that will come into force next year, and we posted that credit this quarter. That is basically it. It is of a tax nature, to your question, and the beginning of the tax reform in January. Let me speak about the impact the tax reform will have in the industry, which is highly positive, both in terms of the tax burden and the monetization of credits. The credit monetization will be faster. But how will that be monetized? We are confident that the tax reform will bring an important, a positive effect on the industry, both on the tax rate and the monetization of tax credits.

That is very relevant for the sector.

Thiago, Analyst, BTG: Excellent. If I may, I do not know if you can quantify how much of those credits are extemporaneous this quarter and the previous quarter.

Analyst: Well, that will be about half. That’s great. Thank you. Henrique Brustolin from Bradesco BBI asks the next question. Good morning. Thank you for taking my questions. I have two. The first one is to Tim from the U.S. Beef. That’s very good to hear that very assertive message in the cycle recovery, closing capacity, importing cattle from Mexico, heifer retention, and the demand remains strong. Here’s my question. When you take into account all these variables, looking to 2027, what would represent the highest risk that would jeopardize that margin recovery starting next year? That’s my first question. The second question is about the follow-up for BRF, especially when you talk about finished goods inventory. There was some sequential growth focused on holiday products, but in the previous quarter, we talked about finished products inventory was heavier to a certain extent.

I would like to understand your take. How comfortable are you at this inventory level for finished goods at BRF, thinking about its monetization cycle in the coming quarters? Thank you.

Tim Klein, Chief Executive Officer of National Beef, National Beef/MBRF: Yes. In my mind, the biggest risk we have is on the demand side. If there was a significant economic downturn for whatever reason that would hurt beef demand, that’s one. The other would be if we had an event like BSE years ago that impacted our export markets. But, other than that, day-to-day, week-to-week, we deal with a lot of the things and variables that are affecting our business, but those would be probably the two big ones that I think about that would affect us going forward.

José Ignácio Scoseria Rey, CFO, MBRF: Good morning, Henrique. As to inventories, especially at BRF, well, the regular inventory levels are back to normal volumes, and that helped us bring inventory levels to normal or to the standard. That increase in the quarter is concentrated for the holiday products, which is only natural to happen in Q3. Rather, there’s some pressure on our inventory levels, and these are transit or inventory levels in transit to the Middle East, an addition of 50,000 tons due to the conflict, and this scenario hasn’t improved. It hasn’t worsened either, so that’s why we have the same level of inventory. Short-term inventory is concentrated. Of course, for the holiday, you’ll monetize it in Q4. Grain inventory will come down after Q3, but the main lever there is the inventory in transit to the Middle East. As I said, over 50,000 tons.

That would depend on the evolution of the conflict in the region. That was very clear. Thank you.

Henrique Brustolin, Analyst, Bradesco BBI: Our next question, Matheus from UBS. Good morning. Thank you for taking my question. My question has to do with capital allocation. The company is very active in your buyback program, BRL 1 billion bought back in the past 12 months. When we think about capital allocation for the next 12 months into 2027, I understand there is an important CapEx reduction, as mentioned. There is an important liability management exercise. If we could consider priorities, considering dividend payouts, buybacks, or investments for growth, or the payment of the principal of the debt, how would you rank those options? The buyback is a good reference based on what you said in the previous past. That was it. Thank you. Good morning, Matheus. In terms of capital allocation, as you said, the message about our CapEx is clear, what we can expect in terms of CapEx reduction for next year.

José Ignácio Scoseria Rey, CFO, MBRF: We touched on that in a previous question. We are confident with our CapEx being able to bring a reduction for next year. In terms of buybacks, in the past quarters, we’ve had an average of BRL 250 million in buyback in the past 12 months. We tend to reduce. We should start seeing a reduction in that. If you look at the program we approved yesterday, it’s a lot more modest to be executed in 18 months. There should be a reduction in buybacks in the next quarter. Not that we will stop doing it. On occasion, we can generate value to shareholders with buybacks, but at the pace we did it in the past 12 months, will come down.

As I mentioned, and working capital should start becoming positive moving forward, I would say that the main priority in terms of capital allocation would be the reduction of the debt. That’s our priority. To perform liability management and to reduce the debt should be the main priority for the next 12 months. Thank you.

Lucas Mussi, Analyst, Morgan Stanley: Lucas Mussi from Morgan Stanley is up next. Good morning, folks. Thank you for taking my question. I have two about the same topic, about Sadia Halal. What are your intentions of going public? What is the structure of Sadia Halal? The second question is more operational. I think we discussed it in the last quarter. Margins remain healthy, about 13%, but gradually we go back to 10%-11%, which is what the division can deliver. What is your take on the margin for the coming 12 months? Now that you have more capacity, other competitors are also boosting their capacity. China is exporting more poultry. What is your take on a more competitive scenario and profitability for Sadia Halal in the coming 12 months, especially taking into account that increased capacity there? That is it. Thank you. Good morning, Lucas. Let me address the Sadia Halal question.

José Ignácio Scoseria Rey, CFO, MBRF: Nothing has changed in our plans. We are discussing with the regulatory or the local regulatory agencies. The plan is moving along with nothing new under the sun. The plan remains the same. As to the other changes with Sadia Halal, $75 million is to be paid at the end of the year for the first tranche. They have that option, and they will exercise that option, which is to increase their stake. Every 10% they increase, that means $170 million that will be brought into the company’s cash flow. Again, we keep on working in the region, and our intention is to fulfill the transactions we had announced. From the business point of view, we had already predicted that in Q2. Even delivering record net revenue numbers in Q3, prices came down slightly.

There was some more inventory in the region when compared to the peak of the war, and we believed margins would come down and remain at that intermediate level. Between the war, the company was running at 10%-11%, and that would be between 10% and 11%, and during the peak in the war, it was 16%. Q3 margins, again, indicate things are going back to normal as far as margins are concerned. For the coming quarters, when we reach the price level that is supposed to be maintained at the same level, and we believe we can maintain that same volume levels for the coming quarters. Let me just add to what Ignácio said. There are two important aspects. One, the market. We have had some recent CSACS data. The Middle East and North Africa is surpassing Asia, including China.

Miguel Gularte, CEO, MBRF: This region becomes more and more relevant as far as demand is concerned. The decisions we have made at BRF when war broke out on February 28th, we kept our shipments and we kept on executing our plan. Food security, which is key to these countries, was met by a supplier that was willing to keep on shipping and to remain present in the region, and we are going to fulfill that till the end of the year. We will be present not only in the Middle East and North Africa, but throughout the region. On the other hand, in December, we will be starting up our Dammam plant that will expand our presence in the KSA. That was a very strategic decision. By starting up that new plant and the expansion in KSA, we will be able to explore that opportunity.

Prices are adjusting as we expected, but a very demanding and very resilient market for both demand and prices in 2027.

Moderator: This concludes the Q&A session and our earnings call. We thank you very much for your participation. I hope you have an excellent day.