Bachoco announced its unaudited results for 2013's first quarter period ending March 31, showing an increase of net sales and earnings before interest, taxes, depreciation and amortization, EBITDA.
"In the first quarter of 2013, prices of our main raw materials stabilized with a downward trend; also, we observed a good balance between supply and demand across our main business lines," said Rodolfo Ramos Arvizu, CEO of Bachoco. "Based on those facts, Bachoco reported satisfactory results, with total sales up 7 percent, with operating and earnings before interest, taxes, depreciation and amortization margins of 7.6 percent and 9.5 percent, respectively, as a result of our productivity and commercial efforts. In particular, we registered important improvements in operating expenses, which came in at 8 percent over net sales, among the lowest percentages in the company's history."
On the other hand, said Arvizu, the company faced sanitary challenges, as some of the Bachoco's farms were affected by an outbreak of H7N3 avian influenza. The company immediately reinforced its bio-security programs and executed several measures to mitigate negative effects in this regard. As of today, the outbreak of influenza is under control but not yet eradicated.
Net sales in the first quarter totaled Ps. 9.99 billion (US$823.2 million), 7 percent higher than the Ps. 9.34 billion (US$969.5 million) in net sales reported in 2012. The increase was mainly due to a 21.4 percent increase in sales of Bachoco's U.S. operations, which represent 22.7 percent of total sales.
Cost of sales for the quarter totaled Ps. 8.51 billion (US$701.3 million), 9.8 percent higher than the Ps. 7.75 billion (US$638.7 million) in cost of sales reported for the same period in 2012. Even when prices of main raw materials stabilized with a downward trend, they were slightly higher than in the first quarter of 2012. Gross profit in for the most recent quarter was Ps. 1.48 billion (US$121.9 million), resulting in a gross margin of 14.8 percent, compared to a gross profit of Ps. 1.59 billion (US$130.8 million), with a gross margin of 17 percent in the first quarter of 2012.
Operating income in the first quarter of 2013 totaled Ps. 761.1 million (US$62.7 million) with a 7.6 percent operating margin, compared with Ps. 779.6 million (US$64.3 million) and an 8.3 percent margin reported in the first quarter of 2012.
Net income was Ps. 635.1 million (US$52.3 million) in the first quarter of 2013, compared with a net income of Ps. 659.6 million (US$54.4 million) reported in the first quarter of 2012.