Industrias Bachoco S.A.B. de C.V., Mexico's leading producer and processor of poultry products, has announced its unaudited results for the first quarter of 2011, ended on 31 March 2011. All figures have been prepared in accordance with Mexican GAAP. Following Mexican Accounting Principles, all data is presented in nominal Mexican pesos (MXP).

Among the highlights are that total sales for the first quarter of 2011 rose 1.9 per cent from the previous year. Chicken sales rose 3.6 per cent during 2011 compared with the same 2010's quarter.

EBITDA margin was 6.0 per cent for the quarter, compared to 8.6 per cent for the same quarter of 2010. Earnings per share in the quarter totalled MXP0.26 (US$0.26 per ADS), compared to MXP0.46 (US$0.46 per ADS) in the same period of 2010.

CEO's comments

Rodolfo Ramos, Bachoco's CEO, stated: "The first quarter of 2011 was difficult for our Company. Our main challenge was to mitigate the negative impact caused by high prices of corn and soybean meal during this period, resulting in higher cost of sales.

"Our chicken business line was affected by a slightly lower demand due mainly to seasonal factors; despite this circumstance, we recorded increases in sales, when compared to the previous quarter.

"The margins for our eggs business line were affected due to a negative streak of oversupply, impacting volume, sales and prices for these products.

"Our balanced feed products, on the other hand, benefited from stable market conditions; we were able to achieve double-digit increases in both sales and volume sold. The swine business line was also very stable and was supported by a good balance between demand and supply.

"As a result of our successful hedging strategies, strong control of operating expenses, and the optimization of our products mix, we were able to soften the impact of having adverse conditions during this first quarter and keep achieving positive results.

"On a final note, the Company's Market Maker began its operations in January of this year, and as a result we have seen an increase in the liquidity of our shares trading in the Mexican Exchange. We are confident that this contract will contribute to a better performance of our shares in addition to the Company's strategy to reach its goals for 2011," said Mr Ramos.

First quarter results by business line

Chicken
Sales of chicken products for the first quarter 2011 increased 3.6 per cent, compared to the same 2010 quarter. The balance between supply and demand was stable, with a slight slowdown trend by the middle of the quarter.

Eggs
Sales of table eggs products decreased by 18.2 per cent during this period of 2011, as egg prices decreased 9.9 per cent and volume fell by 9.2 per cent. These figures are a reflection of a large oversupply period observed within the industry.

Balanced Feed
Our balanced feed sales had an improvement from the same quarter of 2010. Sales increased 29.7 per cent as a result of 5.9 per cent increase in prices and a 22.5 per cent increase in volume sold. Market conditions for these products were favorable during this period. Despite the positive performance observed, this business line was also largely affected by increases in corn and soybean meal prices.

Swine
This business line was stable during the first quarter. Sales rose 6.4 per cent, as swine prices increased 4.6 per cent and volume sold rose 1.7 per cent in the period.

Other Lines
Sales of other lines recorded a decrease, 24.4 per cent lower when compared with the same quarter of 2010, as sales of by-products declined.