Mexican poultry producer Industrias Bachoco posted a drop in operating profit for its second quarter as a result of rising commodity costs.
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Operating profit for the period to 30 June was MXN311.6m (US$497.4m), down from MXN559.6m for the same period in 2007.
Despite this, the company saw a 3% increase in sales for its second quarter, reaching MXN4.98bn.
Bachoco said sales increased in most of its business lines of chicken, eggs and swine.
“Second quarter results continued largely affected by the global trend of higher raw materials prices, which continued to affect the cost of grain and soybean meal,” said Cristobal Mondragon, Bachoco’s CEO.
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By GlobalData“The cost of these ingredients rose even higher during this quarter and reached record levels. These increases coupled with a sluggish economic condition in our markets that did not allow us to fully transfer cost increases into chicken prices, and continued to affect the company’s results.
“Despite said adverse difficulties, we were able to deliver positive results given our focus to reinforce productivity, and optimise our product mix, while keeping the best level of service for our customers.”
