February 16, 2009

Mexico's largest poultry processor Industrias Bachoco has reported a loss of MXN873.5 million (US$60.5 million) for the last quarter of 2008 due to depreciation of Mexican peso against the US dollar.

Bachoco's net income was MXN180.3 million a year earlier.

Fourth-quarter net sales jumped 23.3 percent to MXN5.67 billion thanks to higher sales of chicken, swine and table eggs but CEO Cristobal Mondragon said "several adverse conditions" had hit the company.

Inventory on hand at higher cost affected the company's cost of sales as well as the weakening Mexican economy following global trends, leading to post negative results in terms of operating margin, says Mondragon. Further, the abrupt depreciation of the Mexican peso against the US dollar mainly affected net margins for the quarter, he said.

The Bachoco executive remains hopeful as the company posted the highest level of sales for a quarter. Particularly robust was the volume of chicken sold, while reporting strong results in table eggs, he said.

Bachoco's EBITDA amounted to MXN76.8 million during the fourth quarter of 2008 - compared to MXN347.6 million a year earlier.

For the year, while net sales rose 10.4 percent to MXN20.11 billion, Bachoco recorded a net loss of MXN548.5 million, against net income of MXN1.28 billion for 2007.

US$1 = MXN14.5550 (Feb 16)