Mexico-Poultry industry.
MEXICO-POUTRY COMPANY RESULTS.
Industrias Bachoco S.A.B. de Mexico’s leading producer and processor of poultry products, announced today its unaudited results corresponding to the fourth quarter and full year ended December 31, 2008. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, data for 2008 is presented in nominal pesos while that of 2007 is presented in constant pesos as of December 31, 2007.
Highlights:
-- Total sales in 4Q 2008 increased 23.3% when compared with the same period of 2007; recording the highest sales level in a quarter in the Company’s history, and increasing 10.4% for the full year.
-- Chicken sales volume increased of 7.1% in the period, traditionally the best quarter of a year, and a 4.9% during 2008.
-- The Company recorded a negative operating margin of 1.4% during 4Q 2008 but a positive EBITDA margin of 1.4%.
-- Net loss per share in 4Q 2008 was Ps. 1.46, or US$1.26 per ADR, compared to a net income per share of Ps. 0.30, or US$0.26, per ADR reported in the same 2007 period.
CEO’s Comments:
Cristobal Mondragon, Bachoco’s CEO, stated, "During the quarter, the Company had to tackle several adverse conditions that again affected our results: inventory on hand at higher cost, currently being consumed, affected our cost of sales, and the Mexican economy slowed down following global trends, which led us to post negative results in terms of operating margin. In addition, the abrupt depreciation of the Mexican peso against the US dollar also affected our operating results, but mainly affected our net margins for the quarter.
"Despite this adverse environment, and oversupply conditions in the chicken market at the beginning of the quarter, which were later reversed in the end, we were able to record encouraging results. We recorded the highest sales level for a quarter in the Company’s history; particularly robust was the volume of chicken sold, our main product line, while reporting strong results in table eggs, our second main business line.
"In terms of EBITDA, we achieved positive results and by the end of the quarter we also registered positive operating levels that have spilled over to the beginning of 2009.
"As we have reported during the quarter, our comprehensive financial cost was strongly affected by the abrupt depreciation of the Mexican peso against the US dollar given our hedging position; however, our strong financial position will allow us to face the conditions ahead.
"The Company has successfully implemented several measures to wane the impact of such a challenging scenario, like: the restructuring of the derivatives portfolio, the optimization of the product mix, better services for customers, and productivity improvements, among others. We trust that such strategies will contribute with positive results to the Company’s performance and will allow us to obtain better results in the near future," concluded Mr. Mondragon.
Releases during the quarter:
-- October 14, Bachoco Informs the Effects of the Financial Volatility on Its Financial Position.
-- December 15, Bachoco provides a major disclosure about its financial derivatives position.
To see the complete versions of these releases, please visit our web page: www.bachoco.com.mx
