April 23, 2009

Mexico's largest poultry processor Industrias Bachoco has announced positive results for the first quarter ended March 31, 2009.

Bachoco's quarterly sales are up 23.7 percent on the same quarter of 2008, with increase of 28.2 percent in chicken, 11.0-percent increase in table eggs and 45.9-percent increase in swine, as supply conditions improved in the market.

Operating profit increased 102.5 percent during the quarter, while earnings before interest, taxes, depreciation and amortisation (EBITDA) was 66.3-percent higher at 654.3 million pesos (MXP) in Q1 2009 from MXP393.3 million in Q1 2008.

Results for the chicken business line were strong during the first quarter, while sales of chicken products increased 28.2 percent as chicken prices rose 30 percent; however, this result was partially offset by a 1.3-percent decrease in volume from the previous year. During this quarter the company was able to transfer part of its cost increases to chicken prices.

Sales of eggs increased by 11.0 percent during the first quarter as egg prices rose 17.3 percent from the previous year, but were partially offset by a 5.4-percent decrease in volume mainly driven by the adjustment in the production level of the company.

The balanced feed business line remained affected by higher costs in the inventories of raw materials. Sales of balanced feed decreased by 8.0 percent, while balanced feed prices increased by 19.6 percent, but were offset by a strong decrease in volume sold of 23.1 percent, as demand in the sector declined.

Swine demand and supply were stable during this quarter, with sales significantly increasing by 45.9 percent from Q1 2008, and were driven by a 50.3-perrcent increase in swine prices, partially offset by a 2.9-percent decrease in volume.

Sales of other lines increased 30.1 percent mainly due to higher by-product sales, such as poultry manure.