CELAYA, Mexico – Headwinds in the poultry industry again dragged on the first quarter earnings of Bachoco, although the company reported improved demand for chicken in Mexico and positive results in Mexican and US operations.
Bachoco reported first-quarter net income $596.9 million pesos ($34,583,050), or a basic and diluted income of $0.99 pesos per share, compared with $1.266 billion pesos ($73,349,208), or $2.11 pesos of basic and diluted income per share in the year-ago quarter.
“Conditions prevailing in the poultry industry in the second half of 2015 continued throughout most part of the first quarter of 2016,” Rodolfo Ramos Arvizu, CEO, said in a statement. “We observed over-supply conditions in Mexico, which put pressure on prices. In the US market, we also continued to observe lower prices, mainly in leg quarters and breasts, as compared with the equivalent quarter of 2015.
“Volatility in the Mexican peso continued affecting our cost of sales in Mexico during the quarter; as a result, our operating margins were lower when compared with the first quarter of the previous year.
“However, we saw a good level of demand in the Mexican markets during this first quarter, enabling us to increase total sales by 3.8 percent year over year, and increase volume sold in all of our main product lines in both markets we participate,” Arvizu noted.
Net sales for the company advanced 3.8 percent to $11.84 billion pesos ($685,983,116) compared with $11.41 billion pesos ($661,069,878) Bachoco reported in the first quarter of 2015. “This was a result of more volume sold in our main product lines during the quarter, partially compensated by a reduction in our poultry prices,” the company explained in an earnings release.
“In 1Q16, sales of our US operations were strong and represented 25.5 percent of our total sales compared with 24.4 percent in 1Q15,” the release said.
At the company’s annual shareholders meeting, Bachoco announced a cash dividend of $1.3 pesos per share, or $15.6 pesos per American Depository Receipt (ADR).