Brazil-Meat giant Sadia post first annual loss in their 64 years in the meat business.

Sao Paulo: Brazilian food company Sadia on Friday posted a large fourth-quarter loss, reversing from a profit in the year-ago period because of steep losses on currency derivatives.

The net loss totalled 2.04 billion reais (Dh3.32 billion), compared with profits of 374.5 million reais in the fourth-quarter of 2007, Sadia said in a securities filing.

For the full year of 2008, the company posted a loss of 2.48 billion reais, the first annual loss in its 64-year history.

Sadia had net financial expenses of 2.7 billion reais in the quarter as the cost of non-deliverable forwards, target forward agreements and currency options soared. The company had financial gains of 147.5 million reais a year earlier.

"With the weakening of the real and the resulting financial losses, we have improved our risk management and corporate governance policies and implemented a review of procedures and the structure of our financial department," Sadia said in a statement.

The real surged 20 per cent against the dollar in 2007 and had strengthened an additional 14 per cent in 2008 through early August, prompting Sadia and other companies in Brazil to bet the currency would stay on a strong path.

Those bets turned sour as the turmoil in global markets deepened and concerns over a worldwide recession led to sharp capital outflows from emerging markets.

Despite the large currency losses, net sales jumped 15.9 per cent to 3.06 billion reais.