Mexico-Poultry products.

MEXICO - POULTRY PRODUCTS.

Bachoco has once again achieved its highest quarterly sales – up 23.7 per cent on the same quarter of 2008. The growth was achieved across all main business lines: 28.2 per cent in chicken, 11.0 per cent in table eggs and 45.9 per cent in swine, as supply conditions improved in the market. Operating profit increased 102.5 per cent during the quarter, while EBITDA was 66.3 per cent higher at 654.3 million pesos (MXP) in Q1 2009 from MXP 393.3 million in Q1 2008. Earnings per share (EPS) was MXP 0.46 (US$ 0.39 per ADS) versus MXP 0.38 (US$ 0.32 per ADS) in Q1 2008.

CEO’s Comments

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 US dollar.

"In our industry, however, there was a favourable 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.

"In terms of EBITDA, we achieved a positive margin of 11.2 per cent, larger than the 8.3 per cent margin registered in Q1 2008.

"As we reported last quarter, our comprehensive financial cost continued to be affected by the depreciation of the Mexican peso against the US dollar given our hedging position. However, we have already restructured most of our derivative portfolio to mitigate this effect and expect minor effects in the second half of the year.

"We expect to continue delivering positive results in the second quarter of the year," concluded Mr Mondragon.