In a release dated July 27th Industrias Bachoco S.A.B. de C.V. (IBA NYSE) reported on the second quarter ended June 30th. The company generated a loss of $1.2 million on total sales of $740 million. Approximately 90 percent of sales comprised chicken with 69 percent in Mexico and 31 percent in the U.S. from the OK Foods subsidiary. For the second quarter of fiscal 2019, total revenue was $761million with net earnings of $71.7 million.
In commenting on performance, Rodolfo Ramos Arvizu, CEO stated, “During the second quarter of fiscal 2020 we faced unprecedented challenges in our operations in Mexico and the U.S. due to COVID-19. Confinement measures established in both countries and the slowdown in economic growth caused contractions in demand in our markets and particularly in our food service channel.”
He added, “The Mexican peso depreciated with respect to the U.S. dollar more than 20 percent quarter-over-quarter having a negative impact on our cost of sales despite the good levels on prices of our main raw materials.”
The comments by Snr. Arvizu reflect the results obtained by Pilgrim’s Pride in their Mexican operations.
Bachoco (IBA) has a market capitalization of $1.8 billion and has traded over the past 52 weeks in a range of $28.04 to $57.00 with a 50-day moving average of $36.00. IBA closed at $35.46 on Wednesday August 5th up 2 percent. The trailing 12-month return on assets is 2.5 percent and 8.5 percent on equity.