Bachoco reports fourth-quarter results

Industrias Bachoco S.A.B. de C.V. (Bachoco), Mexico's leading poultry production and processor of poultry products, announced its results for the fourth quarter and year ended December 31, 2008:
*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 for the quarter increased 26.6% as chicken prices rose 18.1%, and volume increased 7.1% from the previous year.
*The table egg business line also remained strong; sales increased by 15.8% during the quarter as egg prices rose 20.9%, which was partially offset by a 4.2% decrease in volume.
*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.
"During the quarter, the company had to tackle several adverse conditions that, again, affected our results,” said Cristobal Mondragon, Bachoco's CEO. “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,” he said. “In addition, the abrupt depreciation of the Mexican peso against the U.S. 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,” Mondragon said.