MEXICO - Commenting on the company's third-quarter results, just published, Industrias Bachoco's CEO reports that stable supply and lower costs in Mexico and the US contributed to higher profits and gross margin than a year ago.
Compared to 2013, Mexico-based feed, meat and egg company, Industrias Bachoco reports net sales up 12.5 per cent for the latest quarter and EBITDA margin at 16.4 per cent for 3Q14 and 14.9 per cent in the 9M14.
Earnings per basic and diluted share totalled $1.87 for 3Q14 and $4.78 for the 9M14.
Industrias Bachoco, S.A.B. de C.V., has released its unaudited results for the third quarter (“3Q14”) and accumulated (9M14) 2014 results ended 30 September 2014. All figures have been prepared in accordance with International Financial Reporting Standard (IFRS”), and are presented in nominal million Mexican Pesos ('$').
Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “For Bachoco, a third quarter used to be the weakest quarter for the year in terms of profitability; this year, the quarter did not follow that pattern, as favourable conditions present in the second quarter were extended into the third one.
"Flexibility in our processes and implementation of new procedures, allowed us to take advantage of the conditions the industry offered and to achieve sound results.
"In general, during the quarter, we observed a very stable supply in our main product lines in both the US and Mexican markets; this, combined with the downtrend in our main raw material prices, allowed us to post a reduction in our production cost, contributing to our profits.
"The Company remained in a healthy financial condition as net cash reached $7,766.3 million, as the cash and equivalents has increased 36.6 per cent since the beginning of the year.”
Summary of Results
The Company’s 3Q14 net sales totalled $10,615.0 million, $1,178.0 million or 12.5 per cent more than $9,437.0 million reported in 3Q13. The increase is a result of more volume of chicken sold and solid chicken and swine prices during the quarter; this result was partially offset with decreases in sales volume in the rest of our business lines when compared to the same quarter of 2013.
In 3Q14, sales of the US operations remained strong and represented 20.1 per cent of our total sales; this compares with 22.7 per cent in 3Q13.
In 3Q14, the cost of sales totalled $8,138.2 million, $17.2 million or 0.2 per cent lower than $8,155.5 million reported in 3Q13; the decrease in the cost of sales, despite the increase in volume sold, was mainly attributed to a steady decrease in the cost of main raw materials, and improvement in our production indexes in general, so that our average cost per unit was around 3 per cent lower than the average cost per unit in 3Q13.
The gross profit was $2,476.8 million and a gross margin of 23.3 per cent in 3Q14; this profit is much higher than a gross profit of $1,281.5 million and a gross margin of 13.6 per cent reported in 3Q13.
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