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Bachoco Reports Decrease in Net Sales

25 October 2013

MEXICO - Industrias Bachoco announced its unaudited results for the third quarter and first nine months of 2013 ended 30 September 2013 and reports that net sales decreased 4.7 per cent during the third quarter of 2013 compared to the same period last year.

The EBITDA margin was 6.0 per cent for the third quarter of 2013 and 11.4 per cent for the first nine months of this year.

Bachoco reports that earnings per basic and diluted share totaled Ps. 0.59 or Ps. 7.07 per ADR during the third quarter.

Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, said: "This was a typical third quarter for the Company, in terms of seasonality, with chicken prices at their weakest.

"Nevertheless, we continued to post positive results and margins in all of our main business lines, with chicken volumes fully recovering by the end of the third quarter as we had anticipated.

"As a result, we estimate that our chicken market share has been recovered, thanks to the confidence of our clients in our company and the excellent job of our sales force.

"Additionally, we faced a tough basis of comparison due to strong results posted in the third quarter of 2012, which was atypically strong, in terms of seasonality for the poultry industry.

"Lastly, our CAPEX were entirely financed with internal resources and our balance sheet remains solid, with strong cash levels."

The company's third quarter net sales totaled Ps. 9,437.0 million, 4.7 per cent below the Ps. 9,901.0 million reported in the same period last year. This mainly resulted from lower chicken prices in the Mexican market and a drop in chicken volume compared to 3Q12. This was partially offset by an increase in egg sales, while the rest of the company's business lines had mixed results.

In the third quarter of 2013, sales of Bachoco's US operations represented 23.0 per cent of total sales, compared with 22.0 per cent during the same period last year.

Total sales for the first nine months of 2013 increased 4.6 per cent when compared with the same period of 2012.

Cost of sales totaled Ps. 8,155.5 million, 2.2 per cent lower than Ps. 8,342.6 million reported in the same period of 2012, mainly due to lower volume sold and steady unit costs of sales.

This resulted in gross profit of Ps. 1,281.5 million and a gross margin of 13.6 per cent in the third quarter, compared to a gross profit of Ps. 1,558.4 million, and a gross margin of 15.7 per cent in the third quarter of 2012.

Meanwhile, gross profit for January to September 2013 was Ps. 5,267.1, 17.6 per cent higher than Ps. 4,420.0 million reached in the same period of 2012. Gross margin was 17.6 per cent and 15.4 per cent in the same periods of 2013 and 2012, respectively.

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