Industrias Bachoco Q1 sales rise, income slips
CELAYA, Mexico – For its fiscal quarter ended March 31, 2013, Industrias Bachoco reported net income of 635.1 million pesos ($52.3 million), or 1.06 pesos per share ($.087), compared with a net income of 659.6 million pesos ($54.3 million), or 1.10 pesos per share ($.09) reported in the first quarter of 2012.
Net sales for the first quarter increased 7 percent to 9,988.8 million pesos ($822.5 million) compared to 9,337.6 million pesos ($768.8 million) in net sales reported in the comparable year ago period. The company attributed the increase to a 21.4 percent increase in sales at its US operations, which represent 22.7 percent of the company's total sales.
"In the first quarter of 2013, prices of our main raw materials stabilized with a downward trend; also, we observed a good balance between supply and demand across our main business lines," said Rodolfo Ramos Arvizu, CEO of Bachoco. “Based on those facts, Bachoco reported satisfactory results, with total sales up 7.0 percent, with operating and EBITDA margins of 7.6 percent and 9.5 percent respectively, as a result of our productivity and commercial efforts. In particular, we registered important improvements in operating expenses, which came in at 8.0 percent over net sales, among the lowest percentages in the company's history.
“On the other hand, we faced sanitary challenges, as some of our farms were affected by an outbreak of influenza H7N3, which only affects birds; we immediately reinforced our bio-security programs, and executed several measures to mitigate negative effects in this regard and to assure our standard quality service to our customers. As of today, the outbreak of influenza is under control but not yet eradicated.
“Due the influenza outbreak, in the first quarter we recognized a one-time charge in our production cost of 220.8 million pesos ($18.2 million), mainly attributed to the loss of inventory.
“Finally, I would like to reiterate the strong financial position that the company maintains, with negative net debt of 3,630.3 million pesos ($298.9 million) at the end of the first quarter."