Industrias Bachoco announces drop in poultry sales
Mexican poultry giant, Industrias Bachoco has announced a 3.5% decrease in sales in its unaudited results for the first quarter 2014 results.
The company's 1Q14 net sales totaled $9,643.4 million, $345.3 million or 3.5% below the $9,988.8 million reported in 1Q13. In 1Q14, sales of US operations represented 19.7% of total sales, compared with 22.7% in 1Q13.
The reduction in sales is mainly attributed to lower prices mainly in chicken and balanced feed, partially offset by higher volume sold of these products.
Rodolfo Ramos Arvizu, chief executive officer of Bachoco, stated: "In the first quarter of 2014 the Mexican poultry industry observed a good balance between supply and demand. In our US market, after a weak start of the year, conditions improved through the quarter.
"Even when our total volumes improved when compared to first quarter 2013, the lower cost in our main raw materials, drove our main product prices down so that net sales posted a decrease of 3.5%. On the other hand, lower raw material prices more than compensated the price reduction; as a result, our operating performance improved with respect to the same quarter of previous year.
"In accordance with the new tax regime in Mexico, as of January 1, 2014, our Mexican operation is subject to a higher tax rate, which negatively impacted our net income in the first quarter. However, despite these conditions, we achieved higher earnings per share. Furthermore, Bachoco maintains a very solid financial position with a negative net debt of $5,665 million."
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