Exhibit 99.1

CONTENTS 

(Free translation from the original issued in Portuguese. In the event of any discrepancies, the Portuguese language version shall prevail.)

Independent auditor’s report on the individual and consolidated financial statements

To the Management and Shareholders of

Marfrig Global Foods S.A.

São Paulo – SP

Opinion

We have audited the individual and consolidated financial statements of Marfrig Global Foods S.A. (the Company), identified as Parent and Consolidated, respectively, which comprise the statement of financial position as of December 31, 2024, and the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the corresponding explanatory notes, including material accounting policies and other explanatory information.

In our opinion, the financial statements present fairly, in all material respects, the individual and consolidated financial position of Marfrig Global Foods S.A. as of December 31, 2024, and its individual and consolidated financial performance and individual and consolidated cash flows for the year then ended, in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) (currently denominated IFRS Accounting Standards).

Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the individual and consolidated financial statements” section of our report. We are independent of the Company and its subsidiaries in accordance with the relevant ethical requirements set forth in the Code of Ethics for Professional Accountants and the professional standards issued by the Federal Accounting Council and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Key audit matters

The key audit matters are those who, in our professional judgment, were the most significant in our audit of current year. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and when we formed our opinion on these individual and consolidated financial statements, and, accordingly, we do not express a separate opinion on these matters.

1. Evaluation for impairment of goodwill arising from business combinations and intangible assets of defined useful life – Notes No. 3.1.6, 14, and 18

Why the matter was determined to be a KAM

As described in Notes No. 14, “Investments”, and 18, “Intangible Assets”, as of December 31, 2024, the Company had goodwill based on expected future profitability and certain intangible assets with finite useful life recorded in the individual and consolidated financial statements, in the amounts of R$ 498,589 thousand, and R$ 19,127,733 thousand, respectively. The assets in question arise from acquisitions of investments made in the current year and in last years, subject to critical judgments and assessments in determining their recoverability, which take into consideration the generation of future profits, among other assumptions. Based on judgments and assumptions, the Company makes estimates to evaluate the likelihood of occurrence or not of future profits to realize said assets as well as to establish the assumptions and estimates that determine such profits.

By definition, the resulting accounting estimates will rarely be equal to the respective actual results (due to uncertainties and the high degree of judgment inherent in determining these assumptions and estimates). Therefore, the estimates and assumptions involve a significant risk and may require a material adjustment to the carrying amounts of the assets in the individual and consolidated financial statements at the date of the respective evaluations. For this reason, we considered this matter significant and, thus, a key audit matter.

How the matter was addressed in the audit of the financial statements

Our audit procedures included, among others:

Based on our audit approach and the procedures performed, we understand that the amounts recorded and the criteria and assumptions adopted and disclosed in the financial statements to assess impairment of certain intangible assets, including goodwill, are appropriate in the context of the individual and consolidated financial statements taken as a whole.

2. Realization of federal and state tax credits – Notes No. 9 and 13

Why the matter was determined to be a KAM

As described in Notes 9, “Recoverable taxes”, and 13, “Deferred income and social contribution taxes”, as December 31, 2024, the Company had federal and state tax credits recorded in the individual and consolidated financial statements, in addition to deferred income and social contribution tax assets arising from tax losses, negative social contribution basis and temporarily non-deductible and/or taxable differences, in the amounts of R$ 7,771,818 thousand, and R$ 17,853,778 thousand, respectively. Said tax credits are subject to critical judgments and assessments in determining their recoverability. The accrual of tax credits by companies in the meatpacking industry is inherent in the business, due to the tax incentives granted by Brazilian legislation to exporters.

Management assesses the impairment risk of these assets when the likelihood of using these tax credits is remote, considering the following legal alternatives: (i) offset against other state and federal taxes, under the prevailing tax legislation; (ii) payments to suppliers; (iii) acquisition of equipment, inputs, and consumables by means of negotiation with suppliers; and (iv) request for approval and refund, in kind, of said tax credits. Regarding the deferred income tax asset, based on judgment and assumptions, the Company makes estimates to evaluate the likelihood of occurrence or not of future profits to realize said asset as well as to establish the assumptions and estimates that determine such profits.

By definition, the resulting accounting estimates will rarely be equal to the respective actual results (due to uncertainties and the high degree of judgment inherent in determining these assumptions and estimates). Therefore, the estimates and assumptions involve a significant risk and may require a material adjustment to the carrying amounts of the assets in the individual and consolidated financial statements at the date of the respective evaluations. For this reason, we considered this matter significant and, thus, a key audit matter.

How the matter was addressed in the audit of the financial statements

Our audit procedures included, among others:

Based on the audit approach and the procedures performed, we understand that the amounts recorded and criteria and assumptions adopted in recording tax credits and respective disclosures are appropriate in the context of the individual and consolidated financial statements taken as a whole.

Other matters

Statements of value added

The individual and consolidated statements of value added (DVA) for the year ended December 31, 2024, prepared under the responsibility of the Company’s management and presented as supplemental information for IFRS purposes, have been subject to auditing procedures which were performed together with the audit of the Company’s financial statements. In forming our opinion, we evaluated if these statements are reconciled to the financial statements and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in NBC TG 09 – Statement of Value Added. In our opinion, these statements of value added were appropriately prepared, in all material respects, according to the criteria defined in said technical pronouncement and are consistent in relation to the individual and consolidated financial statements taken as a whole.

Information other than the individual and consolidated financial statements and auditor’s report thereon

The Company’s management is responsible for this other information that is included in the Management Report.

Our opinion on the individual and consolidated financial statements does not cover the Management Report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in Management Report, we are required to report this fact. We have nothing to report in this regard.

Responsibility of management and those charged with governance for the individual and consolidated financial statements

Management is responsible for the preparation and fair presentation of these individual and consolidated financial statements in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) (currently denominated IFRS Accounting Standards), and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual and consolidated financial statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements, unless Management either intends to liquidate the Company and its subsidiary or to cease operations, or has no realistic alternative to avoid doing so.

Those charged with the Company’s and its subsidiaries’ governance are those responsible for overseeing the financial reporting process.

Auditor’s responsibility for the audit of the individual and consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements, taken as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. In addition, we:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we may have identified during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements, including those regarding independence, and communicate to them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, related safeguards.

From the matters communicated with those charged with governance, we determined those matters that were of most significance in the audit of the financial statements for the current year and are, therefore, the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

São Paulo, February 26, 2025

Grant Thornton Auditores Independentes Ltda.

CRC 2SP-025.583/O-1

Marcelo Castro Valentini

Assurance Partner CRC 1SP-239.472/O-2

The accompanying notes are an integral part of the individual and consolidated financial statements.

9

 

The accompanying notes are an integral part of the individual and consolidated financial statements.

10

 

The accompanying notes are an integral part of the individual and consolidated financial statements.

11

 

MARFRIG GLOBAL FOODS S.A.

Statement of comprehensive income

Years ended December 31, 2024 and 2023

(In thousands of Brazilian reais - R$)

The accompanying notes are an integral part of the individual and consolidated financial statements.

12

 

MARFRIG GLOBAL FOODS S.A.

Statement of cash flows

Years ended December 31, 2024 and 2023

(In thousands of Brazilian reais - R$)

The accompanying notes are an integral part of the individual and consolidated financial statements.

13

 

MARFRIG GLOBAL FOODS S.A.

Statement of changes in equity

Years ended December 31, 2024 and 2023

(In thousands of Brazilian reais - R$)

The accompanying notes are an integral part of the individual and consolidated financial statements.

14

 

MARFRIG GLOBAL FOODS S.A.

Statement of value added

Years ended December 31, 2024 and 2023

(In thousands of Brazilian reais - R$)

The accompanying notes are an integral part of the individual and consolidated financial statements.

15

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

1. OPERATIONS

Marfrig Global Foods S.A. (“Company” or “Marfrig”) is a multinational corporation operating in the food industry, in the food service, retail and convenience, industrial and export channels in Brazil and around the world. With a production footprint spanning the Americas and the Middle East, it has a diversified and comprehensive portfolio of products and its operations are founded on its commitment to excellence and quality, which has assured its products presence in the world’s largest restaurant chains and supermarkets, as well as homes in nearly 100 countries. The Company’s activities include the production, processing, further processing, sale and distribution of animal-based products (beef, pork, lamb, fish and poultry), pastas, margarine, pet food, and plant-based proteins. The Company is domiciled in Brazil and headquartered in the city of São Paulo.

The Company is a publicly held corporation with its shares listed on the Novo Mercado listing segment of the Brazilian Stock Exchange B3 S.A. – Brasil, Bolsa, Balcão (“B3”) under the ticker MRFG3. Because it is listed on the Novo Mercado special corporate governance segment of B3, the Company is subject to arbitration under the Market Arbitration Chamber, pursuant to the arbitration clause in its by-laws. It also trades as a Level I American Depositary Receipt (ADR), under the ticker MRRTY, on the Over-the-Counter (OTC) Market in the United States. Each ADR (USOTC:MRRTY) corresponds to one common share (BOV:MRFG3).

The Company’s stock is also a component of the main performance indicators of Brazil’s Capital Markets, such as the Bovespa Index. Marfrig stock is also a component of the stock indexes of the Brazilian Stock Exchange: Bovespa Index (IBOV); Value Index (IVBX 2); Agribusiness Index (AGFS - IAGRO); BM&FBOVESPA Broad Brazil Index (IBrA); Brazil Index 100 (IBrX 100); Brazil Index 50 (IBrX 50); Consumption Index (ICON); Corporate Governance Trade Index (IGCT); Special Corporate Governance Stock Index (IGC); Novo Mercado Corporate Governance Index (IGC-NM); Industrial Sector Index (INDX); Special Tag-Along Stock Index (ITAG); Small Cap Index (MLCX); and BM&FBOVESPA Dividend Index (IDIV B3). The Company’s stock is also part of the sustainability reference index: Carbon Efficient Index (ICO2).

Weather events in Rio Grande do Sul

On May 1, 2024, Rio Grande do Sul declared a state of public calamity throughout its territory affected by extreme weather events, causing material and environmental damages, with the destruction of homes, roads and bridges, compromising the operation of local and regional public and private institutions and closing public roads.

The subsidiary BRF was affected by total and partial stoppages in its regional operations, industrial complexes, distribution centers and support offices, and made the necessary efforts to resume operations.

Due to these weather events, the Company incurred additional losses and expenses, mainly related to the agricultural and industrial production processes, structural and equipment repairs and expenses with donations, which are presented in the financial statements in the following accounts:

The subsidiary BRF has insurance policies for events of this nature and is in the process of regulating this claim in Rio Grande do Sul.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

2. PRESENTATION AND PREPARATION OF THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS

The Management of the Company approved the issue of these individual and consolidated financial statements on February 26, 2025, and warrants that, based on its judgment, all material information is substantiated and corresponds to that used in its management activities.

2.1. Statement of compliance

Consolidated financial statements

The Company’s consolidated financial statements were prepared and are presented in accordance with accounting policies adopted in Brazil and with International Financial Reporting Standards (IFRS) issued by the IFRS Accounting Standards.

The accounting policies adopted in Brazil include those provided for in Brazilian Corporation Law, the Brazilian Accounting Standards (NBCs) and resolutions and instructions issued by the Securities and Exchange Commission of Brazil (CVM).

The individual and consolidated Statement of Value Added is required under Brazilian Corporation Law and the accounting policies adopted in Brazil applicable to listed companies. IFRS standards do not require said statement. As a result, under IFRS, this statement is being presented as supplementary information, without prejudice to the complete set of financial statements.

Individual financial statements

The parent company financial statements were prepared based on the accounting policies adopted in Brazil and resolutions issued by CFC and are disclosed jointly with the consolidated financial statements, observing the accounting guidelines based on Brazilian Corporation Law (Federal Law 6,404/76), which include the provisions introduced, amended and revoked by Law 11,638 of December 28, 2007 and Law 11,941 of May 27, 2009. The aforementioned laws include other changes, but only the main changes occurred for the Company are presented.

There is no difference between the equity and consolidated income (loss) and the parent’s equity and income (loss) disclosed in the individual financial statements. Thus, the individual and consolidated financial statements are being presented in the same document.

2.2. Basis of presentation

The financial statements were prepared on the historical cost basis, unless otherwise stated. Assets, liabilities and financial instruments, when indicated, may be stated at fair value.

The preparation of financial statements in accordance with IFRS and NBCs requires the use of certain accounting estimates by the Company’s management. The areas involving judgment or the use of estimates relevant for the financial statements are mentioned in Note 3.1.3.

The financial statements are denominated in Brazilian real (R$), which is the Company’s functional and reporting currency.

2.3. Functional currency

The financial statements of each consolidated subsidiary and those used as a basis for accounting for investments under the equity method are prepared using the functional currency of each entity.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Under NBC TG 02/R3 (CVM Resolution 91/22) – The Effects of Changes in Foreign Exchange Rates and Translation of Financial Statements, functional currency is the currency of the primary economic environment in which the entity operates. To define the functional currency of each subsidiary, Management considered which currency significantly influences the sale price of their goods and services and the currency in which most of their production input costs are paid or incurred.

2.4. Foreign currency translation

Transactions and balances

Foreign currency transactions are translated into the functional currency of the Company using the exchange rate at the transaction date. Gains and losses resulting from the difference between the monetary asset and liability balance translation at the end of the period or year and the translation of the transaction balances are recognized in the statement of income. Non-monetary assets and liabilities in foreign currency measured at fair value are translated at the exchange rate on the date on which their fair value is determined and the differences resulting from such translation will be recognized under other comprehensive income on the closing date of each period or fiscal year.

Group companies

The results of operations and the financial position of all consolidated subsidiaries and investments accounted for under the equity method, whose functional currency differs from the reporting currency, are translated from the reporting currency, as follows:

3. SUMMARY OF MATERIAL ACCOUNTING POLICIES

3.1. Material accounting policies

The accounting policies adopted to prepare these financial statements are as follows:

3.1.1. Results of operations

Results of operations are recorded on the accrual basis:

Revenue

Revenue from sales of products is recognized in accordance with NBC TG 47 (IFRS 15) (CVM Resolution 116/22) – Revenue from contracts with customers, establishing a model of five steps to determine the measurement of revenue and how it will be recognized. Therefore, the Company recognizes revenue when the products are delivered and duly accepted by its customers, upon which the risks and rewards related to ownership are transferred. The ownership of risks and rewards is transferred when the products are shipped with the corresponding sales invoice, taking into account the incoterms. These conditions are met when the goods are transferred to the buyer, complying with the main freights modalities used by the Company.

Revenue is shown net of taxes, returns, rebates and discounts and in the consolidated financial statements revenue is also net of intercompany sales eliminations.

Financial income and expenses

Income comprises gains on changes in the value of financial assets and liabilities measured at fair value through profit or loss, as well as interest income obtained using the effective interest method.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Income also includes interest income on invested amounts, gains on the disposal of financial assets and changes in the value of financial assets. Interest income is recognized in the statement of income using the effective interest method.

Financial expenses basically comprise expenses with interest on loans and changes in the value of financial assets and liabilities measured at fair value through profit or loss. Borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset are capitalized with the investment.

3.1.2. SEGMENT REPORTING

The information by operating segment is based on internal reporting to the chief operating decision maker, according to NBC TG 22/R2 (CVM Resolution 103/22) – Segment reporting. The chief operating decision makers are the chief executive officer, the chief financial officer and the chief executive of each division (Beef North America, Beef South America, Poultry, Pork and Processed Products – BRF and Corporate).

The Company’s management identified four main reportable segments that are strategically organized according to the divisions, as per Note 34.

3.1.3. ACCOUNTING ESTIMATES

The preparation of the financial statements in accordance with accounting policies adopted in Brazil and IFRS requires the use of management’s judgment to determine and record accounting estimates. The settlement of transactions involving these estimates may result in values different from estimates, due to the inherent inaccuracy of the process.

The Company reviews estimates and assumptions at least quarterly.

The issues requiring Company’s estimates are as follows:

3.1.4. FINANCIAL INSTRUMENTS

Financial instruments include financial investments and marketable securities, debt and equity instruments, trade accounts receivable and other receivables, cash and cash equivalents, derivative financial instruments, loans and financing, as well as trade accounts payable and other debts.

Financial instruments were recognized in accordance with NBC TG 48 (IFRS 9) – Financial instruments, as per CVM Resolution 76/22.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

These financial assets and liabilities are initially recognized when the Company becomes party to the contractual provisions of the instruments and are subsequently recognized at their fair value plus, for instruments that are not recognized at fair value through profit or loss, any directly attributable transaction costs.

After initial recognition, the Company classifies financial assets as subsequently measured at:

Amortized cost

When the financial assets are held for the purpose of collecting contractual cash flows and the contractual terms of these assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through other comprehensive income (FVOCI)

When the financial assets are held both for the purpose of collecting contractual cash flows and for the sale of these financial assets. In addition, the contractual terms must give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through profit or loss (FVTPL)

When financial assets are not measured at amortized cost, fair value through other comprehensive income or designated as such upon initial recognition. Financial instruments are designated as measured at fair value through profit or loss when the Company manages and makes purchase and sale decisions regarding these investments based on their fair value and in accordance with the Company’s documented risk management and investment decision. After initial recognition, attributable transaction costs are recognized in profit or loss when incurred, along with the fluctuations in fair value.

The classification of the financial assets is based both on the Company’s financial asset management model and on their cash flow characteristics.

Similarly, the Company classifies financial assets and liabilities as subsequently measured at their amortized cost, FVTPL or FVOCI. Financial liabilities measured at amortized cost use the effective interest method, adjusted for any reductions in the settlement value.

Derivative financial instruments and hedge accounting

The derivative financial instruments designated as hedge transactions are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Derivatives are presented as financial assets when the fair value of the instrument is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of financial instruments during the year are recognized directly in the statement of income, except for financial instruments designated for cash flow hedge accounting, which are recognized directly in equity as other comprehensive income. The amounts recognized under other comprehensive income are immediately transferred to the statement of income when the hedged transaction affects profit or loss.

3.1.5. CURRENT AND NON-CURRENT ASSETS

The main policies adopted for current and non-current assets are as follows:

Cash and cash equivalents

Consist of cash, banks and highly liquid financial investments with maturities equal to or less than 90 days at the time of acquisition that are readily converted to known amounts of cash and that are subject to an insignificant risk of change in value.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Financial investments and marketable securities

They include virtually all investments of the following types: time deposit, interest-bearing deposit and repurchase agreements. These investments may be readily redeemed and have an insignificant risk of change in value. In addition, shares and ADRs of listed companies and non-convertible debentures are recorded under this line item.

Trade accounts receivable

Trade accounts receivable are recorded at the fair value and when applicable, discounted to present value, according to NBC TG 12 (CVM Resolution 190/23) – Present value adjustment.

The estimated loss on doubtful accounts is set up in an amount deemed sufficient by Management to cover any losses on the realization of receivables, calculated on an individual basis and considering in its assumptions the concept of estimated credit losses, as introduced by NBC TG 48 (IFRS 9) / (CVM Resolution 76/22) – Financial instruments.

Inventories

Inventories are stated at the average acquisition or production cost, adjusted at net realizable value, if lower than the average cost.

Biological assets

According to NBC TG 29/R2 (CVM Resolution 74/22) - Biological assets and agricultural produce, agricultural activity is the management of the biological transformation of assets (living animals and/or plants) for sale, into agricultural products or into additional biological assets. The Company classifies cattle, poultry, pork and forests as biological assets.

The Company recognizes biological assets when it controls these assets as a result of past events and it is probable that future economic benefits will flow to the Company and the fair value of the asset can be reliably measured.

Under NBC TG 29/R2 (CVM Resolution 74/22) – Biological assets and agricultural produce, biological assets must be measured on initial recognition and at the end of each reporting period at fair value less costs to sell, unless fair value cannot be reliably measured.

The Company values cattle at its fair value based on market prices, and poultry, pork and forests are determined using unobservable data. Therefore, they are classified in the Level 3 fair value category.

Restricted cash

Refers to the balance in a bank account which cannot be used temporarily, derived from business combinations to guarantee certain indemnity events. The classification of cash into current and non-current assets depends on the contractual rules for releasing the amounts to each party.

Investments

The Parent company’s investments in subsidiaries, associates and joint venture are accounted for using the equity method in the financial statements.

Investment property

In accordance with NBC TG 28/R3 (CVM Resolution 107/22), investment property is initially recognized at acquisition cost (including transaction costs) and, after initial recognition, it is measured at fair value.

The fair values are based on market values and reflect the estimated amount at which the property could be negotiated on the appraisal date in an arm’s length transaction. The Company reassess its fair value on an annual basis.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Property, plant and equipment

Property, plant and equipment are stated at acquisition or construction cost, less depreciation calculated using the straight-line method at the rates mentioned in Note 16 and take into consideration the estimated useful lives of assets, based on property lease terms with respect to leasehold improvements.

Finance charges on financing agreements incurred when property, plant and equipment items are being built are capitalized until the asset begins its operations.

Other expenditures are capitalized only if the economic benefits associated with the property, plant and equipment item increase. Any other type of expenditure is recognized as an expense when incurred.

Pursuant to NBC TG 01/R4 (CVM Resolution 90/22) – Impairment of assets, an asset is tested for impairment on an annual basis. The recoverable amount of the asset must be estimated during the year only if there is any indication of impairment.

The recoverability analysis comprises projecting the profitability and future cash of the Company’s business units, which are discounted to present value to identify the degree of recoverability of the asset.

Lease (Right of use)

Leases are accounted for in accordance with NBC TG 06 (R3) / IFRS 16 (CVM Resolution 95/22), which requires that for all lease agreements under the scope of this standard, except those entitled to exemptions, lessees must recognize the liabilities assumed as corresponding entries to the respective right-of-use assets.

The Company opted to use the exemptions proposed by the standard for lease agreements with terms ending 12 months as from initial adoption and for lease agreements whose underlying assets are of low value.

Intangible assets

Intangible assets consist of assets acquired from third parties, including through business combinations, and those generated internally by the Company. They are stated at acquisition or formation cost, less amortization calculated using the straight-line method, and based on the recovery estimated periods.

Intangible assets with indefinite useful lives and goodwill resulting from expected future profitability are not amortized and are tested annually for impairment.

The goodwill represents the excess of total consideration paid over the difference between the fair value of assets acquired and liabilities assumed on the takeover date of the acquired company.

Goodwill is capitalized as an intangible asset and any impairment is recognized in the statement of income.

Whenever the fair value of the assets acquired and liabilities assumed exceeds total consideration paid, the difference will be fully recognized in the statement of income at the acquisition date.

Goodwill from the acquisition of businesses by September 30, 2008 (last acquisition prior to the transition date as of January 1, 2009 referring to full adoption of the International Financial Reporting Standards (IFRS)) was calculated based on the accounting standards prior to NBC TG 15/R4 (CVM Resolution 71/22) - Business combinations. The Company decided to adopt IFRS in all business acquisitions as from September 30, 2008. These goodwill amounts were based on expected future profitability, supported by valuation reports from experts.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

The trademarks acquired from third parties, prior to December 31, 2009, were measured at the paid amount, while trademarks, customer relationship and supplier relationship acquired as part of business combination after September 30, 2008 were calculated at fair value pursuant to NBC TG 15/R4 (CVM Resolution 71/22) – Business combinations, for more details on the business combinations and the respective values derived from each one, see the Company’s previous financial statements.

3.1.6. IMPAIRMENT

According to NBC TG 01/R4 (CVM Resolution 90/22) – Impairment of assets, the impairment test of goodwill and intangible assets with indefinite useful lives is conducted annually, and other intangible assets with finite useful lives are tested whenever there is evidence of non-realization.

Certain intangible assets of the Company have indefinite useful lives, according to valuation from experts.

The recoverability analysis comprises projecting the profitability and future cash of the Company’s business units, which are discounted to present value to identify the degree of recoverability of the asset.

Discounted cash flows to assess the recoverability of assets are prepared for a maximum period of 5 years, strictly in line with the applicable accounting standard. The cash flows are in line with the Company’s strategic plan and growth projections based on past information updated by material facts. The discount rates of the cash flows use the WACC method and were properly discussed and validated with the Company’s management.

When it is not possible to estimate the recoverable amount of an individual asset, an impairment test is conducted in its cash generating unit (CGU), the smallest group of assets to which the asset belongs and for which there are separately identifiable cash flows. The Company adopts as CGU for assessing the recoverable amount of an asset, its segmentation by business unit (BU).

Goodwill recorded on initial recognition of an acquisition is allocated to each BU of the Company that is expected to benefit from the synergies of the combination that originated the goodwill, for purposes of impairment test.

Impairment losses are included in the statement of income. An impairment loss recorded for goodwill is not reversed.

3.1.7. CURRENT AND NON-CURRENT LIABILITIES

Current and non-current liabilities are stated at known or estimated amounts, plus the related charges, exchange rate gains (losses) and/or monetary changes incurred through the balance sheet date, when applicable.

3.1.8. PROVISIONS

Provisions are recognized when an outflow of future economic benefits resulting from past events is probable and they can be reliably estimated.

3.1.9. SHARE-BASED PAYMENT PLAN

The effects of the share-based payment plan are calculated at fair value and recognized in the balance sheet and the statement of income as contract conditions are met and as commented in Note 37.5.

3.1.10. INCOME AND SOCIAL CONTRIBUTION TAXES

The Company recognizes deferred taxes on tax losses, tax loss carryforwards and temporary differences. In the consolidated financial statements, deferred income tax is estimated in compliance with the regulations of the various jurisdictions in which the Company conducts business and with NBC TG 32/R4 (CVM Resolution 109/22) – taxes on income, which requires estimating the current tax position and assessing any temporary differences that result in the difference between the tax and the accounting treatments.

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MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Deferred income and social contribution tax assets and liabilities are offset when there is a legal right to offset tax liabilities using tax credits and provided they are related to the same tax authority and the same legal entity.

Tax losses and tax loss carryforwards calculated in Brazil are not time-barred, but are limited to the use of 30% on taxable income for the year.

Credits from deferred tax assets on tax losses and social contribution tax loss carryforwards are booked to the extent that it is probable that future taxable income will be available for use; these credits may also arise from assets acquired and liabilities assumed on transactions in line with the Company’s business model.

The carrying amount of a deferred tax asset is revised periodically. The projections, limited to ten years, are revised annually. If there are relevant factors that change the projections, these are revised during the Company’s fiscal year.

The assessment of realization of these credits considers future income projections, based on judgments and assumptions. Similarly to any other accounting estimate, actual results may differ due to inherent uncertainties of the process. Consequently, there is a significant risk of adjustments to the carrying amounts of assets recorded in the financial statements.

The projections take into account the Company’s profitability history, adjusted for recent factors and diverse economic scenarios, considering its global presence and diversified operations in the Americas.

Furthermore, income and social contribution taxes for the current year are calculated based on taxable income in accordance with the legislation in force in each jurisdiction in which the Company operates.

3.1.11. DIVIDENDS AND INTEREST ON EQUITY

The distribution of dividends and interest on capital, if any, is made provided that it is within the mandatory minimum dividend amount, and is recorded as current liabilities since it is considered a legal obligation set forth in the bylaws. The amount that exceeds the mandatory minimum dividend, declared by Management before the end of the reporting period, is recorded as additional dividend proposed in equity until the approval by the shareholders at the General Meeting.

3.1.12. EARNINGS PER SHARE

Basic

Basic earning/loss per share is calculated by dividing the earnings or loss attributable to the Company’s controlling and non-controlling shareholders by the weighted average number of common shares outstanding during the year. This calculation is made pursuant to NBC TG 41/R2 (CVM Resolution 113/22) – earnings (loss) per share, excluding the shares classified as treasury shares.

Diluted

Diluted earnings (loss) per share is calculated by dividing the earnings/loss attributed to the Company’s common shareholders by the weighted average number of common shares that would be issued in the conversion of all potential diluted common shares into common shares.

When there are no potential diluted common shares (such as stock option), the number of shares considered in the calculation of basic and diluted earnings remains the same.

		24

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

3.1.13. SHARE ISSUANCE EXPENSES

In accordance with NBC TG 08 (CVM Resolution 188/23) – transaction costs and premium on issue of securities, transaction costs incurred with the raising of funds through the issuance of equity securities should be separately recorded in a valuation allowance which reduces equity, less possible tax effects, except if these costs are immaterial, in which case they are recognized in profit or loss for the year.

3.1.14. TREASURY SHARES

Treasury shares are Company shares acquired by the Company itself and held in the treasury with the specific purpose of exercise of the Company’s stock option plan. Treasury shares are recorded in a separate account.

3.1.15. CONSOLIDATION

Accounting policies are uniformly applied to all consolidated companies and are consistent with those applied in prior years.

Description of the main consolidation procedures:

3.1.16. STATEMENT OF VALUE ADDED

The Company prepared the statement of value added in accordance with NBC TG 09 (CVM Resolution 117/22) – Statement of value added, which is an integral part of the financial statements under Brazilian accounting standards applicable to listed companies, while it represents additional information under IFRS standards.

3.1.17. HYPERINFLATIONARY ECONOMY

The effects were recognized against “Cumulative translation adjustment and asset valuation adjustment” in equity and foreign exchange variations were recorded in the statement of income for the year.

As required by the accounting standard, non-monetary items, as well as the income for the year, were restated by the variation in the inflation index between the initial recognition period and the reporting period, with the aim of recording the balance sheet of subsidiaries at current value.

The translation of the balances of subsidiaries located in a hyperinflationary economy into the reporting currency was made at the exchange rate in force at the end of the year, for balance sheet and statement of income items.

In the financial statements for 2024, restatement due to hyperinflation had a positive impact of R$ 893,407 on the Company’s results.

ARGENTINA

Since 2018, Argentina has been considered a hyperinflationary economy. The inflation rate defined and applied in 2024 was 118% (211% in 2023).

		25

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

TURKEY

Since 2022, Turkey has been considered a hyperinflationary economy. The inflation rate defined and applied in 2024 was 44% (65% in 2023).

The Company has presented the financial statements with the restatement for inflation for subsidiaries in these countries.

3.2. BUSINESS COMBINATIONS

Business combinations are recognized using the acquisition method. The cost of an acquisition is the sum of the consideration transferred, measured at fair value at the acquisition date, and the value of any non-controlling interest in the acquiree.

The Company measures the non-controlling interest in the acquiree at the fair value or based on the acquirer’s share in fair value of the acquiree’s identifiable net assets. Costs that are directly attributable to the acquisition are recorded as an expense when incurred.

Business combinations between entities under common control are recognized using the acquisition method when the agreements have substance and at cost when no substance is observed in the transaction.

In assessing the existence of substance, factors such as involvement of third parties in the transaction, creation of new entities, future plans for the new entity as eventual sale, change of control, among others, are considered.

In a business acquisition, Management assesses the assets acquired and liabilities assumed with the objective of classifying and allocating them according to contractual provisions, economic circumstances and relevant conditions at the acquisition date.

Goodwill is initially measured as the excess of the consideration transferred in the business combination over the fair value of the net assets acquired (identifiable assets and liabilities assumed, net). If the consideration transferred is less than the fair value of the net assets acquired, the difference should be recognized as a gain in the statement of income (gain on bargain purchase).

3.3. ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

The classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement of income and the statement of cash flows are presented considering that the operation was discontinued since the beginning of the comparative year.

These assets are measured at the lower of their carrying amounts and their fair value less costs to sell. When classified as held for sale, intangible assets and property, plant and equipment are not amortized or depreciated.

Assets classified as held for sale are presented separately from other assets in the balance sheet. Similarly, liabilities that are related to assets held for sale are also presented separately from other liabilities.

The result from discontinued operations is presented in a single amount in the statement of income, comprising the total result after Income Tax and Social Contribution of these operations less any impairment loss.

This information is presented in Note 12 - Assets and liabilities held for sale and discontinued operations.

		26

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

3.4. EMPLOYEE BENEFIT PLANS

Subsidiary BRF sponsors supplementary defined benefit and defined contribution pension plans, as well as other post-employment benefits for which annually actuarial studies are prepared by independent professionals and revised by Management. The cost of the defined benefits is established individually for each plan, based on the projected unit credit method.

Remeasurements, which comprise the actuarial gains and losses, the effect of the asset ceiling and the return on plan assets are recognized immediately in the balance sheet with a balancing entry in Other comprehensive income in the year in which they occur, except for the Seniority Bonus, which is recognized in the statement of income for the year. Remeasurements recognized in other comprehensive income are not reclassified.

Subsidiary BRF recognizes the net defined benefit asset when certain conditions are met.

Past service cost is recognized in the statement of income for the year on the following dates, whichever occurs first:

a) when the plan amendment or curtailment occurs; and

b) when subsidiary BRF recognizes the related restructuring costs.

Cost of services and net interest on the defined benefit liability or asset are recognized in the categories of expenses related to the function performed by the beneficiary and in the financial result, respectively.

3.5. HEDGE ACCOUNTING

Cash flow hedge: the effective portion of the gain or loss of the hedging instrument is recognized under Other comprehensive income, and the ineffective portion under financial result. Cumulative gains and losses are reclassified to the statement of income or to the balance sheet when the hedged item is recognized, adjusting the line item in which the hedged item was recorded.

When an instrument is designated as cash flow hedge, the changes in the fair value of the future element of foreign currency forwards and of the timing element of the options are recognized under Other comprehensive income. Upon settlement of the instrument, these hedge costs are reclassified to the statement of income, together with the instrument’s intrinsic value.

A hedging relationship is discontinued prospectively when it no longer meets the criteria for qualifying as hedge accounting. Upon discontinuation of a cash flow hedge relationship where the hedged future cash flows are still expected to occur, the cumulative amount remains under Other comprehensive income until the cash flows occur and the respective amount is reclassified to the statement of income.

Fair value hedge: the effective portion of the gain or loss of the hedging instrument is recognized in the statement of income or in the balance sheet, adjusting the line item in which the hedged item is or will be recognized. The hedged item, when designated in this relationship, is also measured at fair value.

Hedge of net investment in foreign operation: the effective result of the instrument’s exchange rate variation is recorded under Other comprehensive income, in the same line item in which the gains (losses) on the translation of the hedged investments are recognized. Upon disposal of the hedged investments, the accumulated amount is reclassified to the statement of income for the year.

		27

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

3.6. NEW STANDARDS AND INTERPRETATIONS

3.6.1. NEW AND REVISED STANDARDS APPLIED

Management believes that the following standards or amendments have not had and will not have significant impacts on the Company:

		28

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

3.6.2. NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS TO EXISTING STANDARDS THAT ARE NOT YET MANDATORY OR EFFECTIVE AT DECEMBER 31, 2024

Management is assessing whether the following standards and amendments will have significant impacts on the Company:

		29

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

3.7. INTERNATIONAL TAX REFORM

In December 2021, the Organization for Economic Cooperation and Development (“OCDE”) disclosed the rules of the Pillar Two model for an international tax reform (IAS 12 / CPC 32), applicable to multinational groups with consolidated revenues exceeding € 750 million in at least two of the last four years.

Multinational groups falling within the scope of these rules will be required to calculate an effective tax rate in each country where they operate, thus obtaining an effective rate for each jurisdiction.

If the effective tax rate of the jurisdiction in which the group operates is lower than the minimum defined rate of 15%, the multinational group will be required to pay a supplementary amount of income tax relating to the difference.

Since 2024, the Company is subject to the rules of the OCDE Pillar Two model in Austria, South Africa, Netherlands, United Kingdom and Turkey, and has not identified significant impacts for these jurisdictions.

Concurrently, Provisional Measure 1,262, Regulatory Instruction 2,228/24 and Law 15,079/24 were issued in Brazil, introducing the Qualified Domestic Minimum Top-up Tax (QDMTT), effective as from January 1, 2025, representing a partial adoption of the Pillar Two rules.

The Company is monitoring the potential impacts that this new rule may have to the Group.

3.8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements include the accounts of the Company and its subsidiaries, as per the table showing the equity interests of the Company in Note 14.1 – Direct investments of the parent company.

The financial statements of foreign subsidiaries were prepared in accordance with the law of each country where the companies are located and were converted into the accounting policies issued by the IFRS Accounting Standards.

		30

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

The table below presents the direct (blue) and indirect equity interests included in the financial statements:

		31

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

		32

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

3.9. Reclassification of the amounts of advance for asset sale in the balance sheet and in the statement of cash flows for the year ended December 31, 2023

The Company’s Management reclassified the amount of R$ 1,500,000 received as advance on August 28, 2023 for sale of assets, initially recorded under “Advance for asset sale” to “Liabilities related to assets held for sale”, both in current liabilities in the balance sheet and, consequently, the effect of the statement of cash flows, previously recorded as “cash flow from operating activities” to “cash flows from discontinued operations”. The reclassification was made due to the partial closing of the asset sale operation, in which the Company received R$ 5,680,602, recorded under “discontinued operation”, the origin of this amount is the same and its realization was based on a single base, that is, by offset of amounts.

4. CASH AND CASH EQUIVALENTS

Cash and cash equivalents group is composed of cash and demand deposits, as follows:

		33

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

5. FINANCIAL INVESTMENTS AND MARKETABLE SECURITIES

The table below shows the financial investments and marketable securities by type:

(a) Weighted average maturity in years.

(a)      Weighted average maturity in years.

(b)      Investments in private securities and Angolan Government securities, which are presented net of expected credit losses in the amount of R$ 22,530 (R$ 16,466 at December 31, 2023). These refer to bonds in US Dollar at a weighted average rate of 6.82% (US Dollar - 6.34% and bonds - 5.90% in 2023).

		34

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Subsidiary BRF pledged the amount of R$ 69,753 (R$ 9,179 in 2023) as collateral, with no restrictions, for operations with futures contracts traded on the B3, referring to cash and cash equivalents and marketable securities.

The Company’s investments are mainly of types widely adopted by the market, mitigating the risks, liquidity and profitability. Investments include Bank Deposit Certificates (CDBs) and repurchase and reverse repurchase agreements, both indexed to the CDI and with possibility of immediate redemption, as well as fixed-income bonds, which offer predictability of return.

In addition, the Company diversifies its portfolio with investments in the international market, including time deposits with fixed rates and daily liquidity, and Brazilian prize-draw investment bonds structured for predefined periods.

For diversification and adjustment to market dynamics, the Company has investments in alternative modalities that expands its strategic management, such as:

FIDC – Fundos de Investimentos em Direitos Creditórios (Receivables Backed Investment Funds)

Investment in quotas of funds for acquisition of credit rights, which provide the Company with greater flexibility in the allocation of resources, without compromising liquidity or generating an immediate financial burden.

Investment fund

This is an investment fund in fixed-income quotas, with predominant allocation to low-risk assets, such as government and private securities. Its purpose is to provide liquidity and predictability, monitoring economic indicators such as the CDI and the SELIC rate.

National Treasury Securities

These include Financial Treasury Bills (LFT), indexed to the SELIC rate, and National Treasury Notes (NTN), indexed to different economic indicators. These securities provide predictability and protection against exchange rate and inflation rate fluctuations.

6. TRADE ACCOUNTS RECEIVABLE

(a)     Trade accounts receivable with related parties are detailed in Note 36 – Related-party transactions.

		35

 

MARFRIG GLOBAL FOODS S.A.
Notes to the individual (Parent Company) and consolidated financial statements
Years ended December 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except where otherwise indicated)

 

Changes in estimated losses on doubtful accounts are as follows:

In June 2014, a receivables backed investment (Fundo de Investimento de Direitos Creditórios - FIDC) was created to sell a portion of the receivables from the installment sale in the domestic market, in the amount of R$ 150,000 (principal). Invoices negotiated with the fund MRFG amounted to R$ 106,196 in 2024 (R$ 134,343 in 2023).

The Company, through its subsidiary BRF, conducts credit assignments with no right of recourse with Fundo de Investimento em Direitos Creditórios Clientes BRF (“FIDC BRF II”), which exclusively operates in acquiring credit rights arising from commercial transactions carried out with customers in Brazil.

In 2024, FIDC BRF II had as outstanding balance of R$ 959,434 (R$ 1,072,964 in 2023) related to such credit rights, which were derecognized from the Company’s balance sheet at the time of assignment.

In 2024, subsidiary BRF has insurance, letters of credit and other guarantees referring to sales in installments in foreign markets, in the amount of R$ 1,441,599 (R$ 1,003,891 in 2023).

7. INVENTORIES

Inventories of finished products were carried at average purchase and/or production cost, as explained below:

(a)  Refers to the balancing entry of initial recording of the adjustment to present value of trade accounts payable of subsidiary BRF, which is allocated to costs according to the inventory turnover.

The Company grounds its estimates on historical losses and assessment of subsequent realization (market), as follows:

The Company’s Management assessed the estimated net realizable value for inventories, and concluded that the recognized amount is sufficient.