CELAYA, Mexico, Oct. 26 /PRNewswire-FirstCall/ -- Industrias Bachoco S.A.B. de C.V. ("Bachoco" or "the Company") (NYSE: IBA; BMV: Bachoco), Mexico''s leading producer and processor of poultry products, announced today its unaudited results for the third quarter and first nine months ended September 30, 2009. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, data is presented in nominal Mexican pesos.
Highlights: - During the quarter total sales increased 19.3% over the 3Q08. - The Company achieved a positive EBITDA margin of 3.6% compared with a negative result of 2.0% in the same year-ago quarter. - Prices increased across the board for all of Bachoco''s main business lines. - Earnings per ADS for the first nine months reached $1.36 USD compared to $0.48 USD for the same period of 2008. The result per ADS for 3Q09 even when negative at $0.08 USD was better than the same year-ago period. CEO''s Comments:
Cristobal Mondragon, Bachoco''s CEO, stated, "During the third quarter, the Mexican economy continued to slow down, affecting the purchasing power of Mexican consumers, and, consequently, we saw a weaker demand for our products when compared with the second quarter.
"In particular, the Mexican poultry industry was affected by higher raw materials costs, mainly those of soybean meal, following the trends in the commodity market. The slowdown in the economy did not allow us to fully transfer the costs increases to our products'' prices. In addition, it is worth noting that traditionally this quarter is the weakest of the year.
"Despite this condition, we managed to increase our total sales and were able to reach positive operating results. We continued implementing our growth plans through the integration of several business agreements reached during the quarter, with which we expect to strength our leadership position in the Mexican poultry industry.
"Finally, our financial position remained strong, we generated a good level cash and our indebtedness level remained low," concluded Mr. Mondragon.
THIRD QUARTER 2009 RESULTS Net Sales
Net sales for the third quarter amounted to Ps. 5,613.6 million, 19.3% above the Ps. 4,704.5 million reported in 3Q08. This increase was mainly driven by a 24.7% increase in chicken sales, 1.7% increase in table eggs sales, and 7.3% increase in swine sales, but was partially offset by a 2.7% decrease in balance feed sales.
Net sales 3Q09 (%) 3Q08 (%) Chicken 79.2 75.8 Eggs 9.7 11.4 Balanced feed 6.5 7.9 Swine 1.0 1.1 Other lines 3.6 3.8 100.00% 100.00% Operating Results
Bachoco''s third quarter gross margin was 12.0%, higher than the 7.5% reached in the same quarter of 2008. The increase in the gross margin is attributed to the 16.0% increase in sale prices, which were partially offset by a 13.4% increase in the cost of sales.
The Company had an operating profit of Ps. 35.3 million, compared to an operating loss of Ps. 243.6 million in the same quarter of 2008. The operating margin for the third quarter of 2009 was 0.62%.
The EBITDA result was Ps. 200.7 million, compared with a negative EBITDA result reported in the same quarter last year of Ps. 92.7 million.
Taxes Total taxes recognized for the third quarter were Ps. 11.8 million. Comprehensive Financial Income (Cost)
The Company''s financial comprehensive cost was Ps. 27.9 million during the quarter, compared to a financial comprehensive cost of Ps. 235.5 million reported in the same last year''s quarter.
Net Majority Income (loss)
Net majority loss for the third quarter totaled Ps. 53.1 million, or Ps. 0.09 per share (US$0.08 per ADS), compared to a net majority loss of Ps. 100.3 million, or Ps. 0.17 per share (US$0.15 per ADS) reported in the same 2008 period.
RESULTS BY BUSINESS SEGMENT Chicken
Sales of chicken products increased 24.7% as chicken prices rose 14.3% and the volume grew 9.1%. Even when the result was positive, this business line was sharply affected by the pressure of chicken prices, decreasing significantly from 2Q09, mainly due to a weaker demand in the industry.
Table Eggs
Demand for table egg products was strong; sales of table eggs increased by 1.7% during the third quarter as egg prices rose 2.5% from the previous year. The result was partially offset by a slight volume decrease of 0.8% directly attributed to an adjustment in the Company''s production.
Balanced Feed
Sales of balanced feed decreased by 2.7%, mainly due to a 9.1% increase in prices, which was partially offset by a 10.8% decrease in balance feed volume. This business line was directly affected by higher grain costs.
Swine
The swine business line was stable during the third quarter, swine sales rose 7.3% as a result of a 2.0% increase in swine prices and a 5.2% increase in swine volumes when compared to the same period of 2008.
Other Lines
Sales of other lines increased 13.8% when compared with 3Q08. The main products sold were by-product sales, such as poultry manure.
FIRST NINE MONTHS OF 2009 Net Sales
Net sales for the first nine months of 2009 amounted to Ps. 17,471.5 million, 21.0% above the Ps. 14,435.3 million reported in the same period of 2008. The increase was mainly driven by the 24.2% increase in chicken sales, 13.8% in table eggs sales, 15.3% in swine sales and 0.2% increase in balanced feed sales.
Net sales Jan - Sep Jan - Sep 2009 (%) 2008 (%) Chicken 78.6 76.6 Eggs 10.0 10.7 Balanced feed 6.4 7.7 Swine 1.0 1.0 Other lines 4.0 4.0 100.00% 100.00% Operating Results
The Company''s gross margin for the first nine months of the year was 18.5% higher than 14.3% in the same 2008 period, and was mainly attributed to higher sales in all of our business lines, mainly for chicken and table eggs products. The Company''s operating profit was Ps. 1,388.7 million, which favorably compares to an operating profit of Ps. 312.3 million reached in the same period of 2008. EBITDA was Ps. 1,874.3 million, well above the Ps. 761.0 million recorded in the same last year''s period. EBITDA margin for the first nine months of 2009 was 10.7%.
Taxes
The Company recognized income taxes and deferred income taxes amounting to Ps. 223.9 million.
Net Majority Income
Net majority income for the first nine months of the year was Ps. 916.5 million, or Ps. 1.53 per share (US$1.36 per ADS), compared to net income of Ps. 324.9 million, or Ps. 0.54 per share (US$0.48 per ADS) reported in the same 2008 period.
Balance Sheet
Liquidity is solid with cash and cash equivalents amounting to Ps. 2,259.9 million as of September 30, 2009. The total debt outstanding was Ps. 1,048.8 million as of September 30, 2009.
Capital Expenditures CAPEX during the first nine months of 2009 amounted to Ps.706.5 million. Exhibits: A.- Consolidated Balanced Sheets B.- Consolidated Statement of Income C.- Consolidated Statement Cash Flow D.- Derivatives Position Report Company Description
Industrias Bachoco S.A.B. de C.V. (also referred to in this report as Bachoco or the Company) is the largest poultry company in Mexico, with over 700 production and distribution facilities currently organized in nine complexes throughout the country. Bachoco''s main business lines are: chicken, eggs, and balanced feed, among others. The Company is also present in other businesses like swine, beef, margarine and turkey in Mexico. The Company''s headquarters are in Celaya, Guanajuato, located in Mexico''s central region. For more information, please visit Bachoco''s website at http://www.bachoco.com.mx/ or contact our IR department.
This press release contains certain forward-looking statements that are subject to a number of uncertainties, assumptions and risk factors that may influence its accuracy. Actual results may differ. Factors that could cause these projections to differ include, but are not limited to: supply and demand, industry competition, environmental risks, economic and financial market conditions in Mexico and operating cost estimates. For more information regarding Bachoco and its outlook, please contact the Company''s Investor Relations Department.
Exhibit A: Consolidated Balance Sheets Industrias Bachoco, S.A.B. de C.V. Condensed Consolidated Balance Sheets U.S.D. Mexican Pesos 2009(1) 2009(2) 2008(2) As of As of September September 30, 30, ASSETS Current assets Cash and cash equivalents $ 167 Ps 2,260 Ps 1,988 Total accounts receivable 99 1,331 1,129 Inventories 327 4,413 4,919 Other current assets - - - Total current assets 593 8,004 8,036 Net property, plant and equipment 811 10,949 10,717 Other non current assets 41 554 368 TOTAL ASSETS $1,445 Ps 19,507 Ps 19,121 LIABILITIES Current liabilities Notes payable to banks 37 502 69 Accounts payable 93 1,255 1,184 Other taxes payable and other accruals 31 422 431 Total current liabilities 161 2,179 1,684 Long-term debt 41 547 63 Labor obligations 7 95 73 Deferred income taxes and others 143 1,932 2,465 Total long-term liabilities 191 2,574 2,601 TOTAL LIABILITIES $ 352 Ps 4,753 Ps 4,286 STOCKHOLDERS'' EQUITY Majority stockholder''s equity: Capital stock 170 2,295 2,295 Paid-in capital 55 744 744 Reserve for repurchase of shares 12 159 159 Retained earnings 785 10,592 11,418 Net majority income of the year 68 917 325 Deficit from restatement of stockholder''s equity - - - Derivate financial instruments - - (150) Total majority stockholder''s equity 1,089 14,706 14,791 Minority interest 4 48 45 TOTAL STOCKHOLDERS'' EQUITY 1,093 14,754 14,836 TOTAL LIABILITIES AND STOCKHOLDERS'' EQUITY $ 1,445 Ps 19,507 Ps 19,121 (1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009 (2) Millions of Mexican nominal pesos Exhibit B: Consolidated Statement of Income INDUSTRIAS BACHOCO, S.A.B. DE C.V. Consolidated Statements of Income -unaudited- THIRD QUARTER U.S.D. Mexican Pesos 2009(1) 2009(2) 2008(2) Net sales $ 416 Ps 5,614 Ps 4,705 Cost of sales 366 4,938 4,353 Gross profit (loss) 50 676 352 Selling, general and administrative expenses 47 641 595 Operating income (loss) 3 35 (244) Comprehensive financing (cost) income (2) (28) (235) Interest income 2 33 (174) Interest expense and financing expenses (2) (23) (111) Foreign exchange gain (loss), net (1) (18) 50 Other financial income (expense) net (1) (20) - Other income (expense) net (5) (70) (33) Income before income tax, asset tax (5) (63) (512) Total income taxes (1) (12) (413) Income tax, asset tax 2 21 (57) Deferred income taxes (2) (33) (356) Net income $ (4) Ps (51) Ps (99) Minority net income 0 2 2 Majority net income (4) (53) (100) weighted average shares outstanding (in thousands) 599,954 599,954 600,000 Net majority Income per share (in U.S.D per ADS) (0.08) (0.09) (0.17) (1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009 (2) Millions of Mexican nominal pesos FIRST NINE MONTHS OF YEAR U.S.D. Mexican Pesos 2009(1) 2009(2) 2008(2) Net sales $ 1,294 Ps 17,472 Ps 14,435 Cost of sales 1,055 14,238 12,364 Gross profit (loss) 239 3,233 2,072 Selling, general and administrative expenses 137 1,844 1,759 Operating income (loss) 103 1,389 312 Comprehensive financing (cost) income (10) (134) (252) Interest income 8 107 (76) Interest expense and financing expenses (5) (67) (182) Foreign exchange gain (loss), net (3) (37) 5 Other financial income (expense) net (10) (137) - Other income (expense) net (8) (106) (27) Income before income tax, asset tax 85 1,149 33 Total income taxes 17 224 (296) Income tax, asset tax 5 72 69 Deferred income taxes 11 152 (365) Net income 69 925 329 Minority net income 1 9 4 Majority net income 68 917 325 weighted average shares outstanding (in thousands) 599,930 599,930 600,000 Net majority Income per share (in U.S.D per ADS) 1.36 1.53 0.54 (1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009 (2) Millions of Mexican nominal pesos Exhibit C: Consolidated Statement of Cash Flows Industrias Bachoco, S.A.B. de C.V. Consolidated Statement of Cash Flows Mexican Pesos U.S.D. 2009(2) 2008(2) As of As of 2009(1) September 30, September 30, NET MAJORITY INCOME BEFORE INCOME TAX $ 85 Ps. 1,149 Ps. 33 ITEMS THAT DO NOT REQUIRE CASH: (18) (237) 197 Other Items (18) (237) 197 ITEMS RELATING TO INVESTING ACTIVITIES: 34 455 434 Depreciation and others 36 486 449 Income (loss) on sale of plant and equipment (2) (22) (10) Other Items (1) (9) (4) ITEMS RELATING TO FINANCING ACTIVITIES: 11 151 106 Interest income (expense) 3 44 182 Other Items 8 107 (76) NET CASH GENERATED FROM NET INCOME BEFORE TAXES $ 112 Ps. 1,518 Ps. 770 CASH GENERATED OR USED IN THE OPERATION (44) (589) (810) Decrease (increase) in accounts receivable 12 163 78 Decrease (increase) in inventories 52 705 (1,155) Increase (decrease) in accounts payable (54) (727) 19 Income taxes paid (54) (729) 248 NET CASH FLOW FROM FINANCING ACTIVITIES $ 69 Ps. 929 Ps. (40) INVESTING ACTIVITIES NET CASH FLOW FROM INVESTING ACTIVITIES (61) (821) (667) Acquisition of property, plant and equipment (52) (706) (927) Proceeds from sales of property plant and equipment (1) (17) 34 Other Items (7) (98) 225 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES $ 8 Ps. 108 Ps. (707) FINANCING ACTIVITIES Net cash provided by financing activities: 13 180 (345) Proceeds from loans 133 1,800 468 Principal payments on loans (102) (1,377) (445) Dividends paid (19) (250) (236) Other items 1 7 (132) NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 21 288 (1,052) CASH AND INVESTMENTS AT THE BEGINNING OF YEAR 146 1,972 3,040 CASH AND INVESTMENTS AT END OF PERIOD $ 167 Ps. 2,260 Ps. 1,988 (1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009 (2) Millions of Mexican nominal pesos Exhibit D: Derivatives Position Report Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of September 30, 2009 Table 1 Type of Financial Instrument Objective of Notional The Instrument Forwards, knock out forwards, Hedge and $ 1,384,290 puts, collars and others under negotiation different amounts and conditions* Corn Futures and Hedge $ 240,862 soybean meal Futures** Options for corn*** Hedge $ 699 and negotiation Options for soybean meal**** Hedge -$ 1,716 and negotiation Type of Financial Instrument Value of the Related Commodity 3Q-2009 2Q-2009 Forwards, knock out forwards, $13.50 $13.17 puts, collars and others under different amounts and conditions Corn Futures and Corn of Dec and Corn of Sep and Dec, soybean meal** March $3.4400 $3.5450 and and $3.5675 $3.6725 USD/bushel USD/bushel respectively. respectively. Soybean meal of Soybean meal of Aug and Sep Dec and Jan $374.30 and $285.5 and $339.30 USD/ton. $282.7 USD/ton. Options for corn*** Corn: $3.4400 USD/ Corn: $3.5450 USD/ per bushel for per bushel for Dec and Sep and $3.5675 for $3.6725 for January 2010 December Options for soybean meal**** Soybean meal: Soybean meal: $285.5 USD/ $374.30 USD/ per ton for per ton for Dec and Aug and $314.3 $282.7 for and $306.30 USD/ January 2010 ton for Oct and Dec respectively Type of Financial Instrument Reasonable Value Amounts Guaranties 3Q-2009 2Q-2009 Due by Required Year Forwards, knock out forwards $27,246 -$74,408 puts, collars and others under different amounts and conditions* Corn Futures and -$32,870 -$22,565 soybean meal Futures** The deals consider the Options for corn*** 2009 and possibility 2010 of margin calls but $ 699 $ 84 not another kind of guaranty Options for soybean meal**** -$1,716 $ 7,044
None of the financial instruments exceed 5% of total assets as of September 30, 2009
* The 58.1% of the instruments will due in 2009 and the rest during the first half of 2010.
The notional value represents the net position as of September 30, 2009 at the exchange rate of Ps.13.50 per USD.
** The 99% of the instruments will be due in 2009 *** All the instruments will be due in 2009 **** The 38% of the instruments will be due in 2009 A negative value means an unfavorable effect for the Company Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of September 30, 2009 Table 2 Kind of Financial Reasonable Value of the Related Commodity Instrument Value As of /reference value March 31 -3% 3% 5% Forwards, knock out $27,246 $13.10 $13.91 $14.18 forwards, puts, collars and others under different amounts and conditions* -5% 5% 10% Corn Futures and -$32,870 $3.27 $3.61 $3.78 soybean meal Futures** $271.23 $299.78 $314.05 Options for corn*** $699 $3.27 $3.61 $3.78 Options for soybean meal**** -$1,716 $271.23 $299.78 $314.05 Kind of Financial Effect on the Effect on the Instrument Income cash Flow***** Statement -3% 3% 5% Forwards, knock out forwards, puts, collars Direct $3,237 $62,584 $33,464 and others under different amounts and conditions* -5% 5% 10% Corn Futures and -$43,270 -$22,470 -$12,071 soybean meal future** Options for corn*** The effect will $1,756 -$180 -$386 materialize as the inventory is consumed Options for soybean -$6,087 $2,655 $7,026 meal**** * The reference value is the exchange rate of the Mexican peso and USD, $13.50 pesos per USD as of September 30 of 2009. ** The reference value is the future in USD per bushel, here referenced to corn, $3.4400 for December and $285.5 USD/ton for December for Soybean meal. *** The reference value is the future in USD per bushel, here referenced to corn for December 2009. **** The reference value is the future in USD per ton, here referenced to Soybean meal for December 2009. ***** The company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown IR Contacts: Daniel Salazar, CFO Claudia Cabrera, IRO Ph. +52 (461) 618 3555 inversionistas@bachoco.net In New York: Grayling Lucia Domville Ph. (646) 284-9416 Lucia.Domville@us.grayling.com Headquarters: Industrias Bachoco, S.A.B. de C.V. Av. Tecnologico 401, Celaya, Gto. Mexico, 38010 http://www.bachoco.com.mx/
Industrias Bachoco, S.A.B. de C.V.
CONTACT: IR Contacts: Daniel Salazar, CFO, or Claudia Cabrera, IRO, both
of Industrias Bachoco, +011-52-461-618-3555, inversionistas@bachoco.net; or In
New York: Lucia Domville, Grayling, +1-646-284-9416,
Lucia.Domville@us.grayling.com, for Industrias Bachoco
Web site: http://www.bachoco.com.mx/