Bachoco has reported a net sales increase of 12.1 percent for the first quarter of 2013, despite difficulties brought on by avian influenza in Mexico. The second quarter for Bachoco ended on June 30. 

"Seasonally, the second quarter is usually the strongest quarter of the year, and it seems this quarter will follow that trend," said Rodolfo Ramos Arvizu, CEO of Bachoco.

After a complicated start to 2013, Bachoco was able to surpass difficulties and achieve positive results. 

Bachoco's chicken sales volume decreased this quarter, as a consequence of the outbreak of avian influenza in Mexico that affected the company's breeding farms in the state of Guanajuato. As of July 2013, production is recovering while avian influenza in Mexico is being brought under control. On the other hand, Arvizu said, the supply of main products was stable and prices were at solid levels.

The company's second quarter net sales totaled Ps. 10.5 billion, 12.1 percent higher than the Ps. 9 billion reported in the second quarter of 2012. This resulted from increases in sales across main business lines, largely due to seasonality, as the second quarter tends to be the strongest quarter of the year, together with a stable supply and good price levels.

Sales of Bachoco's U.S. operations accounted for 19.3 percent of total sales during the second quarter of 2013.


Total sales in the first half increased 9.6 percent, when compared with the same period in 2012. The improvement comes on the back of a strong second quarter 2013 performance.

Cost of sales totaled Ps. 8 billion, 1.1 percent lower than the Ps. 8.1 billion reported in the same period of 2012. The decrease in cost of sales was mainly due to the decline in chicken volume, as a result of inventory loss caused by the influenza outbreak.

At the same time, the company recognized a one-time additional charge of Ps. 87.8 million in the production cost, resulting from the loss of inventories.

As a result, the company's gross profit in the second quarter of 2013 totaled Ps. 2.5 billion, resulting in a gross margin of 23.8 percent, compared to a gross profit of Ps. 1.3 billion, and a gross margin of 13.6 percent reached in the second quarter of 2012. Meanwhile, gross margin was 19.4 percent in the first half of 2013, compared to 15.3 percent in the same period of 2012.

In the second quarter, total operating expenses reached Ps. 826.5 million, compared to Ps. 857.3 million reported in the same quarter of 2012. This shows an important improvement, as total expenses in the most recent quarter represented 7.8 percent of net sales, compared to 9.1 percent recorded in the second quarter of 2012, mainly due to a strict control over all operating expenses.