Minerva Profit Falls 57% to US$38 Million as Debt Costs Bite

Brazil · Business

The company sold more beef than ever and booked its biggest quarterly revenue on record. Yet the bill for its ambitious Marfrig plant buy is now landing squarely on the bottom line.

Minerva, one of South America’s largest beef exporters, earned R$196.9 million (about US$38.1 million) in the second quarter of 2026. That was down 57% from a year earlier, even as revenue climbed to a quarterly record.

What Minerva reported

Minerva posted net income of R$196.9 million, about US$36 million, for the second quarter of 2026. That was down 57% from R$458.3 million, about US$85 million, a year earlier.

The steep drop came despite record revenue, so the pressure sat lower down the accounts. Net profit, not sales, was the weak spot in an otherwise busy quarter.

The company is one of South America’s largest beef exporters, based in Barretos, Sao Paulo state.

Revenue hits a record

The top line was the bright spot in the quarter. Net revenue edged up 1.3% to R$14.1 billion, about US$2.6 billion.

That was a quarterly record, driven by strong beef exports across South America. The plants Minerva bought from Marfrig added scale and pushed volumes higher.

Beef prices abroad held up, and a weaker real flattered export earnings in reais. So the trouble was not selling beef, but what it cost to finance the machine.

Why the profit fell so hard

The damage was done by financial expenses, not by the core meat business. Interest on a much larger debt load ate deep into the quarter’s result.

Most of that debt was raised to pay for the Marfrig plant acquisition. A weaker real and higher rates lifted the bill on that borrowing.

Currency swings also inflated the reported value of dollar-linked debt. What began as a solid operating quarter ended as a slim net profit.

The Marfrig deal behind the debt

Minerva agreed to buy a set of South American meat plants from rival Marfrig. The deal was worth roughly US$1.5 billion and expanded its footprint across the region.

It turned Minerva into an even bigger force in beef, but it was funded with debt. That borrowing now carries an interest bill that lands every quarter.

The strategy adds sales and capacity, yet the financing cost is the near-term price.

Reading Minerva’s EBITDA

Adjusted EBITDA, a rough gauge of operating cash profit, came in at R$1.2 billion. That is about US$220 million, and it slipped 5.5% from a year earlier.

Against revenue, it points to an EBITDA margin of about 8.7%. EBITDA strips out interest, tax and depreciation, showing the plants at work.

The margin is thin, a reminder that beef processing is a high-volume, low-margin trade. Even so, cash from operations remains the buffer against a heavy interest bill.

Cattle costs add to the squeeze

Beyond financing, the price of cattle also weighed on the quarter. Live cattle grew more expensive, lifting the single biggest cost in the business.

That squeezed the gap between what Minerva pays for animals and earns on meat. Higher cattle prices are good for ranchers but tough for the processors that buy from them.

It is a familiar swing in the beef cycle, and it turned against Minerva this quarter. Brazil’s cattle herd and pasture conditions set the tone for those prices.

The debt and leverage picture

The clearest strain sits on the balance sheet, in the company’s borrowings. Leverage is measured as net debt against earnings before interest, tax and depreciation.

After the Marfrig deal, that ratio has been sitting in the mid-2x range. That is a level lenders and rating agencies watch closely.

Bringing it down is now a central task for management in the quarters ahead. Steady cash generation and asset sales are the usual levers to pull it lower.

How the market reacted

Investors have been wary of Minerva through 2026, and the shares have slid this year. The stock, traded in Sao Paulo under the ticker BEEF3, has lagged the wider market.

A record top line no longer impresses if interest keeps chipping away below it. Two straight quarters of sliding profit have kept sentiment cautious.

Some analysts have trimmed their price targets as the debt burden lingers. The market is now focused on cash flow and how fast the company can cut debt.

There has even been talk in the market about the founding family taking the firm private.

What Minerva does

Minerva is one of South America’s largest beef exporters and a Brazilian company. It slaughters cattle and processes beef across Brazil, Argentina, Paraguay, Uruguay and Colombia.

Much of that meat is shipped abroad, to markets from China to the Middle East. That makes its results a close read on global beef demand and the cattle cycle.

The Marfrig deal cemented its place among the biggest players in the region. It also sells beef by-products, from leather to pet food ingredients, alongside fresh cuts.

What to watch next

Three things will shape the coming quarters for the company. Watch cattle prices, the strength of the real, and the pace of debt reduction.

If financing costs ease, more of the record revenue should reach the bottom line. Export demand, especially from China, will also color the outlook.

Any move to buy back debt or refinance it at lower rates would help. For now, Minerva is selling more beef than ever, but keeping less of the proceeds.

Frequently Asked Questions

How much did Minerva earn in Q2 2026?

Minerva reported net income of R$196.9 million (about US$38.1 million), down 57% from a year earlier.

Why did Minerva’s profit fall if revenue hit a record?

Higher financial expenses, mainly interest on debt raised for the Marfrig plant deal, ate into the result. Rising cattle costs added to the squeeze.

What was Minerva’s revenue and EBITDA?

Net revenue rose 1.3% to a record R$14.1 billion (about US$2.73 billion). Adjusted EBITDA slipped 5.5% to R$1.2 billion, an 8.7% margin.

What does Minerva do?

Minerva is one of South America’s largest beef exporters, slaughtering cattle and processing beef across five countries for export worldwide.

Sources: CNN Brasil, InfoMoney, Estadao, Reuters, Minerva Foods IR (2T26 release).