October 8, 2018 / 2:52 PM / in 2 months

UPDATE 3-Brazil's BRF to conclude asset sales in Dec, tips next CEO

(Adds asset sales details, share performance)

By Ana Mano

SAO PAULO, Oct 8 (Reuters) - Executives at Brazilian food processor BRF SA detailed a turnaround plan on Monday, saying the company plans to conclude asset sales in December and naming a successor to Chief Executive Pedro Parente.

Parente, who will stay on as chairman, said Chief Operating Officer Lorival Luz would succeed him as CEO, with the transition expected to be complete in mid-2019.

Parente was named chairman and CEO in June as part of a management overhaul demanded by investors after consecutive money-losing quarters accompanied by allegations BRF sought to evade food safety checks for its meat. BRF faces export embargoes in the European Union spurred by the scandal.

The company is open to working with authorities regarding food sector probes, Parente said, while declining to comment on specifics.

BRF shares reversed early session gains, falling 1.33 percent at 22.19 reais in afternoon trading.

BRF, the world's largest chicken exporter, is looking to turn around a string of poor results through financial discipline, brand repositioning, and increased production in the Persian Gulf.

That discipline includes asset sales in Argentina, Europe and Thailand expected to close in the first days of December, Luz said, adding that BRF has a dozen bidders for the assets but no binding offers yet.

The company previously said it hopes to raise 5 billion reais ($1.33 billion) via asset sales, keeping it on target with plans to reduce debt in the next few months, he said.

The plans aim to reverse a drop in profit margins by 2019, achieve a return to historic margin levels by 2020 and increase them further starting in 2021, executives said.

"A reversal of the margin drop is fundamental for us in the year of 2019," Parente said.

BRF said it is repositioning its health-focused flagship Sadia brand in the domestic market, where it derives about 50 percent of its revenue, to cater to wider audiences.

An increase in halal meat production in Muslim markets of the Gulf states, such as Saudi Arabia, is also part of the strategy, said Patricio Rohner, vice president for halal markets.

Among other targets, the company hopes to end a ban by the EU affecting 12 of its plants after the European Commission found deficiencies in Brazil's health inspection services.

For the company to resume dividend payments, the executives said, BRF must raise return on invested capital above the costs of capital, achieve higher margins and lower indebtedness. ($1 = 3.7623 reais) (Reporting by Ana Mano; additional reporting by Jake Spring; Editing by Jonathan Oatis, Steve Orlofsky and Bill Berkrot)

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