Industrias Bachoco announces record Q1 results

Mexico’s largest poultry producer Industrias Bachoco has reported the highest net sales for a first quarter in the Company’s history; this figure rose 54.5%.

The Mexican poultry industry demonstrated an adequate balance between supply and demand, with greater stability within the international markets of the main raw materials and an appreciation of the Mexican peso against the US dollar.

“During the first quarter we observed a strong demand for chicken and eggs in the Mexican market, which allowed us to close the gap in prices following the sharp increases in raw material costs in recent quarters,” commented Rodolfo Ramos, chief executive officer. “As a result, we had increases in sales across all our business lines, and when combined with the additional sales generated from our operation in the United States, Bachoco achieved record first quarter sales.

“In the first quarter of 2012, we achieved positive results in the Company’s operations in Mexico and the US, reaching an EBITDA of Ps. 1,027.6 million, an EBITDA margin of 11.0%, derived from the aforementioned external factors and the continuous efforts to improve efficiency, productivity and the marketing efforts of our staff”.

During 1Q12 there was a more steady supply of chicken products in Bachoco’s key markets. This factor, coupled with the integration of OK Industries into Bachoco’s sales in Mexico, lead to a 54.5% increase in net sales compared to the same period of 2011.

During the first quarter, chicken product sales grew to Ps. 7,894.4 million, which represented 84.5% of the Company’s net sales. This increase in chicken sales resulted from a 21.0% increase in chicken prices and a 33.1% growth in volume of chicken sold. From total chicken sales, 76.3% was sold in Mexico and 23.7% at Bachoco’s US operation.

Table egg sales in 1Q12 totaled Ps. 634.5 million, which represented 6.8% of the Company’s net sales. Egg sales rose 29.2% compared to 1Q11, as a result of a 19.8% increase in prices and a 7.9% rise in volume sold. Increase in sales stemmed from the reinstallation of production capacity within Bachoco’s farms in Mexicali, which had dropped as a result of the earthquake that affected its facilities in 2010.