Bachoco, Mexico's leading producer and processor of poultry products, announced its un-audited results corresponding to the first quarter ended March 31, 2009. The company recorded its highest sales level for a quarter in its history, with total sales increasing 23.7% compared to the first quarter of 2008.
Bachoco’s sales rose across its main business lines: 28.2% in chicken, 11.0% in table eggs and 45.9% in pork, as supply conditions improved in the market.
Cristobal Mondragon, Bachoco’s CEO, stated, "During the quarter, the Mexican economy continued slowing down following the global trend, and we continued to experience a further depreciation of the Mexican peso against the U.S. dollar.
"In our industry, however, there was a favorable balance between supply and demand that allowed us to transfer part of our past cost increases to our prices in our main product lines. This, combined with our internal efforts to serve our clients properly by optimizing the product mix (we made adjustments to our supply relative to the same quarter of 2008), and improved efficiency, allowed us to increase total sales to a new historical record and achieve positive results in terms of operating and net income.
"We expect to continue delivering positive results in the second quarter of the year," concluded Mondragon.
The feed business line remained affected by higher costs in the inventories of raw materials. Sales of feed decreased by 8.0%, while feed prices increased by 19.6%, but were offset by a strong decrease in volume sold of 23.1%, as demand in the sector declined. Feed represented close to 6% of the company’s quarterly sales.
As far as Bachoco’s outlook goes, they expect the peso-dollar exchange rate to remain volatile and think the worldwide decrease in the costs of raw material will benefit the company in 2009. Bachoco expects a good balance between supply and demand in second quarter.