Bachoco continues to invest in growth

Reporting double-digit increases in net sales and profit for the second quarter of fiscal year 2017, the CEO of multinational poultry and livestock feed firm, Industrias Bachoco highlighted recent acquisitions as evidence of the company’s continued achievements in international expansion.

(Bachoco)
(Bachoco)

Reporting double-digit increases in net sales and profit for the second quarter of fiscal year 2017, the CEO of multinational poultry and livestock feed firm, Industrias Bachoco highlighted recent acquisitions as evidence of the company’s continued achievements in international expansion.

Last month alone, Bachoco acquired Mexican pet food company, La Perla and U.S. further processor, Albertville Quality Foods based in Alabama, said CEO, Rodolfo Ramos Arvizu.

On the overall results, he commented that second-quarter performance was in line with expectations, and that supply and demand were in balanced growth in both the markets where the firm is active – Mexico and the U.S.

With increases in both volume and average prices of poultry meat, net sales were more than 13 percent higher for the second quarter of 2017 than in the same period last year. As an indicator of profitability, Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) was over 17 percent and exceeded MXN2.5 billion (US$140 million). Almost one quarter of total sales by Bachoco are generated by its U.S. operations.

Compared with the same period of 2016, Bachoco’s poultry division increased net sales by 4.3 percent in volume and 13.2 percent in pesos. The cost of those sales was up by more than 14 percent, however, which was attributed to increased sales and raw material costs, and depreciation of the peso against the US dollar.

For the first half of the current fiscal year, net sales were up from the same period of 2016 by more than 14 percent at just over MXN28.8 billion (US$1.62 billion), with MXN21.3 billion (US$1.2 billion) generated in Mexico, and the U.S. operation contributing almost MXN7.47 billion (US$420 million). Poultry sales for the half-year achieved increases of 3.1 percent in volume and 14.3 percent in peso value.

Taking into account the increased costs of production, first-half gross profit was MXN5.80 billion, bringing a gross margin of 20.2 percent. Equivalent figures for 2016 were MXN5.11 billion (US$290 million), and 20.3 percent, respectively.

According to the WATTAgNet Top Poultry Companies database Industrias Bachoco is the largest poultry company in its home country of Mexico, and in the Top 10 chicken producers worldwide when its U.S. arm, O.K. Foods, is included.

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