Industrias Bachoco 3Q net sales up 3.5 percent

by Meat&Poultry Staff
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CELAYA, Mexico – Industrias Bachoco SAB de C.V. announced for the third quarter ended Sept. 30 net sales increased 3.5 percent to Ps. 6,514.7 million (US$495.5 million). This was result of a strong performance in the balanced feed businesses, eggs and other business lines, as well as a slight increase in chicken products sales, partially offset by a decline in swine sales.

Chicken sales rose 0.7 percent, table egg sales increased 8.8 percent in 3Q11 and EBITDA margin was 0.5 percent in compared to 15.4percent in 3Q10, which resulted from a 3.9 percent increase in sales volume, partially offset by a 3.1 percent decrease in chicken prices as industry supply for chicken products rose during the period.

The net majority loss per share of Ps. 0.178 (USD$ 0.154 per ADS), compared to net majority income per share of Ps. 1.058 (USD$0.915 per ADS) in 3Q10.

"The third quarter's results were sharply affected by several external conditions that lead the company to post negative net income in the quarter, mainly; the continuous increase in the cost of grain and oversupply conditions within the Mexican poultry industry, which led to a reduction in our chicken prices while compared with the same quarter of 2010,” said Rodolfo Ramos, chief executive officer.

"On a positive note, total sales increased across the company's main product lines, preserving positive EBITDA for the quarter, while adequate administration of our financial instruments softened the impact of the peso's depreciation when compares to the US dollar,” he added.

As a result of a larger supply of swine in the Mexican market, the company’s sales decreased 8.3 percent, resulted from a 5.9 percent decrease in prices and 2.5 percent decrease in sales volume.

In the first nine months of 2011, net sales totaled Ps. 19,173.8 million (US$1,458.4 million); a 4.0 percent increase from the same year-ago period. Increases in net sales were driven by an increase of 32.6 percent in balanced feed sales and 3.7 percent in chicken sales.

Operating profit in the first nine months totaled Ps. 185.1 million (US$14.1 million), less than Ps. 1,937.1 million (US$147.3 million) in the same nine month period 2010. The operating margin in the first nine months of 2011 was of 1.0 percent, compared to 10.5 percent in the same period 2010.

EBITDA in the first nine months of 2011 amounted to Ps. 718.6 million (US$54.7 million), 70.7 percent below the Ps. 2,449.4 million (US$186.3 million) reported in the same period 2010. EBITDA margin declined from 13.3 percent to 3.7 percent in 2011.

Net majority income for the first nine months of 2011 totaled PS. 185.6 million (US$14.1 million), or Ps. 0.309 per share (US$0.267 per ADS), compared to a net majority income of Ps. 1,527.7 million, or Ps. 2.55 per share (US$2.200 per ADS) reported in the same period 2010.

Industrias Bachoco is the leading Mexican poultry company. Its main product lines are chicken, table eggs, balanced feed and swine. It achieved net sales of more than US$ 2 billion in 2010.
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