Industrias Bachoco, Mexico's leading producer and processor of poultry and food products, has reported increased net sales but a decrease in eggs sales in its second quarter results for 2011.
Rodolfo Ramos, Bachoco's CEO, stated: "Our second quarter results were characterised by the challenge facing the poultry industry worldwide, higher grain costs. Given this is the largest component of the Company's cost of sales, margins and profitability were affected despite efficiency improvements and hedging strategies.
"Even with the increase in our cost of sales, the operating results for our business during the second quarter were positive. We capitalised on the higher demand for chicken and balanced feed products in the Mexican market, thereby achieving greater sales volume and revenues from these business lines.
"The Company's egg business continued to be affected by a large oversupply in the Mexican market; therefore egg sales volume and prices declined in the second quarter.
"Bachoco is focused on factors that will enable the Company to maximise its results. Through strict cost and expense controls, productivity improvements and enhanced sales efforts, the Company continues to work towards maintaining a healthy financial position while remaining the leader in the Mexican poultry industry. Furthermore, we believe that our hedging policy has helped us mitigate the effects of grain price increases and we expect to continue with the same strategy for the rest of the year."
Highlights (2Q11 vs. 2Q10):
• Net sales for 2Q11 rose 6.7% to Ps. 6,616.8 million
• Chicken sales rose 6.9% in 2Q11
• Table egg sales declined 4.9% in 2Q11
• EBITDA margin was 4.9% for 2Q11, compared to 15.4% reported for 2Q10
• Earnings per share in 2Q11 reached Ps. 0.23 (USD$ 0.24 per ADS), compared to Ps. 1.03 (USD$1.06 per ADS) in 2Q10
Source: Industrias Bachoco