BRB Foods, which through its subsidiary manufactures products for Unilever under license in Brazil, has applied for a public offering of shares in the US.
The São Paulo-based holding company housing the production business BRB Brands and the transportation operation Boni Logistica has issued a prospectus with the US Securities & Exchange Commission (SEC) for $8m worth of common stock.
It will then seek a listing on the New York Stock Exchange. The shares have been priced at a par value of $0.001, according to a SEC filing yesterday (17 January). The proceeds will be used for working capital, capital expenditure and to finance the purchase of raw materials.
BRB Foods describes itself as an “emerging growth company”, set up in Brazil in 2020. BRB Brands produces pasta, rice, beans, corn and snacks under licence from Unilever, such as the brands Knorr, Arisco, Maizena and Mãe Terra.
“Our company specialises in the entire process of acquiring, processing, manufacturing, selling and packaging high-quality dry food products that are distributed to and marketed at major retailers and foodservice establishments throughout Brazil,” BRB Foods said in the SEC filing.
While the company’s revenue and profit metrics are denominated in Brazilian reais, the financial results are presented in US dollars. BRB Foods added that the business is incorporated under the law of the State of Wyoming but its executives, directors and assets are located in Brazil.
In the nine months to 30 September, BRB Foods generated total group sales of $9.5m. In the previous two fiscal years, sales amounted to $14.6m and $3.4m, respectively, according to the SEC document.
However, BRB Foods posted a year-to-date net loss of $4.7m, compared to a profit of $405,192 for the full 2022 financial year. The business was also loss-making in 2021 to the tune of $173,435.
BRB Foods explained: “Since 2020, most of our free cash flow has been used to fund our operations and growth, capital expenditure investments, human resources and other expenses.
“As a result, we experienced losses in fiscal year 2021. In 2022, we carried out a series of management, asset and financial adjustments, laying the foundations for improving the company’s performance for the year ended December 31, 2022.”
Unilever’s and BRB Brands’ product assortment in Brazil features Knorr broths, seasonings and pasta, and Arisco condiments, mustard and mayonnaise. Mãe Terra includes organic cereal, cookies and snacks, while Maizena is a corn-starch brand.
Like other global food manufacturers, BRB Foods said it was hit by rising commodity prices in 2022, made worse by the war in Ukraine, along with variations in the reais-dollar exchange rate.
BRB Foods added: “A lack of lines of credit available to us as a result of our short credit history, and the reaction of competitors to our arrival in the market are the major external factors that posed significant challenges to the company during fiscal year 2022.”
In an effort to head off the commodity pressures, BRB Foods said it increased prices to consumers, "therein being more reactive without harming our margins”.
