MEXICO: Poultry over-supply, grain costs drive Bachoco into red
Mexican poultry group Industrias Bachoco has filed a third-quarter loss as an over-supply of chicken and higher feed costs hit its bottom line.
Bachoco yesterday (27 October) reported a net loss of MXN106.9m (US$8.1m) for the three months to the end of September, compared to a net profit of MXN635.1m a year earlier.
The company made an operating loss of MXN150.4m in the third quarter of this year. A year earlier, it booked an operating profit of MXN812.1m.
Net sales increased 3.5% to MXN6.51bn thanks to a "strong performance" from its feed and egg operations and a "slight increase" in chicken sales.
However, CEO Roldofo Ramos said: "The third quarter's results were sharply affected by several external conditions, 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."
Ramos said the increased sales had helped Bachoco's EBITDA stay positive in the third quarter. Bachoco reported EBITDA of MXN29.5m, compared to MXN971.6m a year ago.
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