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Record-High Revenue and EBITDA Growth of 42.9%

Barretos, November 14, 2008 – Minerva (BOVESPA: BEEF3; Bloomberg: BEEF3.BZ; Reuters: BEEF3.SA), one of the market leaders in Brazil in the production and sale of fresh beef, leather and live cattle exports, announces today its results for the third quarter of 2008 (3Q08). Except where stated otherwise, the financial and operating information in this release is presented in BRGAAP and Brazilian real (R$), and comparisons are in relation to the same periods of 2007.

3Q08 HIGHLIGHTS

  • The Company ended the quarter with cash and cash equivalents of R$565.5 million, representing three times the amount of debt maturing in the short term.Regarding debt terms, 83% of gross debt matures in the long term, representing an improvement in relation to June, which minimizes refinancing risk and shows that even during a volatile period the company demonstrated the required credibility to obtain new funding, effectively lengthening its debt profile.
  • Despite the highly turbulent periods in global financial markets, Minerva set a new record for quarterly net sales in 3Q08 of R$624.5 million, which represents organic growth of 53.9% in relation to 3Q07. Net revenue growth was driven by sales by the beef division in the domestic market, which advanced 103.9% in the same period, demonstrating the continued strong performance of personal consumption in Brazil. In 4Q08, the Company inaugurates distribution centers in two new Brazilian states.
  • In the quarter, the average fresh beef price rose 46% (68% in dollar terms) in the export market and 41% in the domestic market. The successful passthrough of prices reflects the efficient sales policy of widespread distribution to small and midsized retailers in the domestic market and the solid positioning in growing and profitable markets such as the Middle East, Asia and Venezuela.
  • Despite higher production costs, EBITDA recorded strong year-on-year organic growth of 42.9% in 3Q08 and 48.1% in 9M08. The margin compression in the quarter reflects the BRL appreciation (average rate +13% in the quarter), higher raw material costs, higher expenses with marketing and non-recurring adjustments with provision for doubtful accounts (R$ 3.1 million).
  • The effects from monetary and FX variations resulting from the devaluation of the Brazilian real in the end of September led to a FX variation expense of R$80.7 million, which generated an accounting impact (non-cash), resulting in a net loss of R$55.2 million, compared with adjusted net income of R$14.6 million in 3Q07.

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