February 10, 2010

Industrias Bachoco 2009 profits up 513%

For fiscal year 2009, Mexican poultry firm Industrias Bachoco saw operating profits reaching MXN1.43 billion (US$110 million), up 513.2% from MXN233.2 million (US$18 million) in 2008.

Net sales amounted to MXN23.27 billion (US$1.8 billion), up 15.7% on 2008. The increase was driven by a 17.8% increase in chicken sales, 11.8% in table eggs sales and 11.7% in swine sales, which were partially offset by a 0.4% decrease in balanced feed sales.

Cristobal Mondragon, Bachoco's CEO, said during the fourth quarter, the company observed lower raw materials prices, which coupled with the firm's efficiency strategy, allowed Bachoco to improve the cost of sales.

The chicken industry was stable during the quarter; there was a good level in the supply and demand balance, especially around the holiday season. However, the prices have remained under pressure, and were mainly attributed to a weaker purchasing power of the Mexican population as the economy slowed down, said Mondragon.

He added that prices are expected to improve as the Mexican economy shows signs of recovery.