AI affects Industrias Bachoco Q2 Results

Mexican poultry giant, Industrias Bachoco, has released positive second quarter results despite being influenced by the recent AI outbreak in the country.

Rodolfo Ramos Arvizu, chief executive officer of Bachoco, stated, “Seasonally, the second quarter is usually the strongest quarter of the year, and it seems this quarter will follow that trend.

“After a complicated start to the year, the Company was able to surpass various difficulties and achieve positive results. All this was due to a strict control of expenses and productivity improvements, resulting from a close surveillance of procedures and constant implementation of processes and technologies that make us more productive day to day.

“The Company’s chicken sales volume decreased this quarter, as a consequence of the outbreak of avian flu that affected our breeding farms in the state of Guanajuato; at this time, this problem is under control but not totally eradicated, and our production is in the process of recovering normalised levels.

“On the other hand, the supply of our main products was stable in the markets we operate and prices were at solid levels, both conditions that are common during the second quarter in the poultry industry.

“Lastly, the Company maintains a solid Balance Sheet, and we recently announced a strategic acquisition of assets and inventory of a breeder operation in the US, which was financed with internal resources.”

The Company’s 2Q13 net sales totaled Ps. 10,546.6 million, 12.1% higher than the Ps. 9,404.0 million reported in 2Q12. This resulted from increases in sales across its main business lines, mainly due to seasonality, as the second quarter tends to be the strongest quarter of the year, together with a stable supply and good price levels. 2Q13 sales of the company’s US operations accounted for 19.3% of total sales.

Total sales in 1H13 increased 9.6% when compared with the same period of 2012 on the back of a strong 2Q13 performance.

Cost of sales totaled Ps. 8,040.0 million, 1.1% lower than Ps. 8,127.3 million reported in the same period of 2012. The decrease in cost of sales was mainly due to the decline in chicken volume, as a result of inventory loss caused by the influenza outbreak.