• Net profit falls 3.7%
  • Operating income slides to MXN761.1m
  • Net sales up 7%
Results were impacted by gross margin that slid

Results were impacted by gross margin that slid

Industrias Bachoco, the Mexican poultry processor, saw its earnings slide in the first quarter on the back of lower margins.

In the three months to the end of March, net income fell 3.7% to MXN635.1m (US$52.1m). Results were impacted by gross margin that slid to 14.8% from 17% last year. Operating margin also declined, to 7.6% from 8.3%.

Operating income slid to MXN761.1m in the quarter, from MXN79.6m, mainly due to one-time charges as a consequence of the outbreak of bird influenza, which the firm says is under control.

Net sales totalled MXN9.99bn, a 7% increase on last year due to a 21.4% sales increase in its US operations.

Show the press release

 

Bachoco Announces First Quarter 2013 Results

CELAYA, Mexico, April 25, 2013 /PRNewswire/ -- Industrias Bachoco S.A.B. de C.V."Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the first quarter period ("1Q13") ended March 31, 2013. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("Pesos" or "Ps.").

HIGHLIGHTS 1Q13

  • Net sales increased 7.0%
  • EBITDA margin was 9.5%
  • Earnings per basic and diluted share totaled Ps. 1.06, or Ps. 12.76 per ADR.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, "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.

Based on those facts, Bachoco reported satisfactory results, with total sales up 7.0%, with operating and EBITDA margins of 7.6% and 9.5% 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% 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 Ps. 220.8 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 Ps. 3,630.3 million at the end of the first quarter."

 

Original source: Industrias Bachoco