Industrias Bachoco has said pressured prices stemming from an oversupply of poultry in Mexico and volatility of the Mexican peso have hit profits in the first quarter.
For the period ending 31 March, net profit fell to MXP596.9m (US$34.6m) from MXP1.26bn a year earlier. Operating income dropped to MXP696.3m from MXP1.66bn in the first quarter of 2015.
Sales, however, were higher year-on-year at MXP11.8bn from MXP11.4bn. Sales in Mexico rose 2% to MXP8.8bn. In the US, sales grew 9.3% to MXP3bn.
Rodolfo Ramos Arvizu, the CEO of the Mexican poultry processor, said: “Conditions prevailing in the poultry industry in the second half of 2015 continued throughout most part of the first quarter of 2016. 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 breast, 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”.
Industrias Bachoco said it had however seen “a good level of demand” in the Mexican markets during the period, leading to a total sales increase and an increase in volumes sold in all of its main product lines in both markets.