Industrias Bachoco saw its net sales decline 6.4 percent in the first quarter of fiscal year 2019, despite a 1.2 percent increase in volume sold.
The Mexico-based poultry company reported net sales of MXN14.32 billion (US$750 million) for the first quarter, compared to MXN15.3 billion (US$810 million) for the same period of the 2018 fiscal year. In terms of volume sold, the company reported 553,175 tons sold in the first quarter of 2019, up from the 546,750 tons sold in the first quarter of 2018.
Broken down geographically, Bachoco’s net sales in Mexico were MXN10.3 billion (US$540 million) for the quarter and MXN 4.01 billion (US210 million) in the United States. Net volume sold in Mexico was 425,745 tons for the quarter, with 127,430 tons sold in the United States. O.K. Foods is Bachoco’s U.S. subsidiary.
“In Mexico, the conditions prevailing in the last two quarters of 2018 continued into the first quarter of this year,” Rodolfo Ramos Arvizu, chief executive officer (CEO) of Bachoco, stated in a press release. “In general, we saw sluggish demand conditions that kept prices down for most of the quarter. Furthermore, strong results in 1Q18 made it very challenging to compare with.
“In the U.S. market, we observed also relatively low prices for most of (the first quarter), with an improvement towards the end of the quarter. Prices of our main raw material were stable in U.S. dollar terms, but volatility in the Mexican peso exchange rate versus the U.S. dollar did not allow us to completely capture this benefit. Our SG&A continued to be mainly affected by energy prices in Mexico.”
Bachoco’s net income dropped 76 percent for the quarter. For the first three months of 2019, it achieved a net income of MXN302.5 million (US$15.93 million), compared to MXN1.26 billion (US$66.4 million) for the first quarter of the 2018 fiscal year.
According to the Poultry International Top Poultry Companies survey, Bachoco is the largest poultry company in Mexico and the fifth largest in North America.
