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Bachoco CEO Optimistic Despite Disappointing Q3

by 5m Editor
29 October 2008, at 11:18am

MEXICO - Industrias Bachoco S.A.B. de C.V. (Bachoco), the leading producer and processor of poultry products, has announced its unaudited results for the third quarter and first nine months ended 30 September 2008.

Highlights

  • Chicken volume sales increased 5.2% during the quarter, while table eggs sales rose 25.1%.
  • The company's financial structure remains healthy with cash and cash equivalents amounting to 1,987.7 million pesos (MXN).
  • The company recorded negative operating quarterly results.
  • The comprehensive financial cost was negatively impacted by a MXN235.5 million charge in the quarter mainly due to the effect of financial instruments related to the exchange rate and raw materials.
  • Net income per share for third quarter was a negative result of MXN0.17 per share (US$0.18 per ADS), compared to net income per share of MXN0.62 (US$0.67 per ADS) reported in the same 2007 period.

CEO's Comments

Cristóbal Mondragón, Bachoco's cheif executive officer, stated, "During this quarter, our Company faced severe adverse conditions that lead us to negative operating results.

"Traditionally, the third quarter is the weakest of the year; however, demand for chicken was particularly weak during this third quarter, which combined with the ongoing growth of the industry, pushed for an excessive oversupply in our markets.

"In addition, the ongoing increase in raw materials costs continued affecting our cost of sales.

"At the end of the quarter the unstable worldwide economic and financial situation also affected Mexico, imposing additional difficulties for our operating markets and, finally, to our financial results.

"We are focusing on our operating goals, such as productivity improvements throughout all our production and distribution chain, the optimization of our product mix as well as the commercialization of our distribution channels while offering the best service to customers.

"Despite the current adverse conditions and the challenging scenario, we feel confident that the Company will overcome these unfavourable conditions by taking advantage of our strengths, knowledge and experience in the industry," concluded Mr Mondragón.

5m Editor