CELAYA, Mexico, Jan. 26 /PRNewswire-FirstCall/ -- Industrias Bachoco S.A. de C.V. (BMV: Bachoco UBL) ("Bachoco" or "the Company"), Mexico's leading producer and processor of poultry products, today announced unaudited results for the fourth quarter and full year ended December 31, 2005. All figures have been prepared in accordance with Mexican GAAP and are stated in constant Mexican pesos as of December 31, 2005.
Full Year Quarter 2005 Highlights:
* Bachoco reached sales of Ps. 14,437.4 million, the highest in Bachoco's
history and 5.4% more than reported in 2004.
* Operating income was Ps. 2,181.5 million, more than twice that level
achieved in 2004.
* Gross margin for the year was 27.9% compared to 19.3% reached in 2004.
* EBITDA reached Ps. 2,642.6 million, almost twice the
Ps. 1,374.5 million achieved in 2004.
* The Company recorded an EPS of Ps. 5.92 (US$3.34 per ADS) for the year,
compared to Ps. 2.42 (US$1.37 per ADS) in 2004
Comments from the CEO:
Cristobal Mondragon, CEO of Bachoco, stated, "Even under the difficult market conditions our Company faced during the fourth quarter, mainly in the chicken industry in Mexico, we are very satisfied with the results achieved during the full year 2005. Volumes sold in our main product lines, sales and operating income all reached the highest full year levels in the history of the Company.
We believe these results are being driven by our constant efforts to improve our cost structure and enhance efficiency, as well as our goal of being close to the customers and satisfying their needs. This has allowed us to fully benefit from favorable external conditions and to face adverse situations well prepared.
We expect the oversupply conditions in chicken and eggs to remain at least through the first quarter of 2006.
As we have been reporting during the past several quarters, the Company's financial profile remains strong with cash and cash equivalents of Ps. 3,167.7 million, while debt is at historically low levels. In addition, CAPEX continues to be fully financed through internally generated resources from the Company's operations. CAPEX for this quarter was Ps. 245.4 million."
FOURTH QUARTER 2005 RESULTS
Net Sales
Net sales for the quarter reached Ps. 3,270.5 million, a decrease of 9.6% compared to Ps. 3,619.3 million reported for 4Q04. This was mainly due to decreases of 12.6% in chicken sales, 12.1% in eggs and 15.1% in swine sales, but was partially offset by an increase of 18.8% in balanced feed.
Net Sales by Product Line 4Q04 4Q05
% %
CHICKEN 80.03 77.41
EGGS 9.84 9.58
BALANCED FEED 6.50 8.55
SWINE AND OTHER LINES 3.62 4.46
TOTAL COMPANY 100.00% 100.00%
Operating Results
Bachoco's gross margin was 18.2% in 4Q05, compared to 25.7% in 4Q04, mainly due to a decrease in the price of chicken. The Company's operating margin was 2.9%, compared to 13.6% in the same quarter of 2004. EBITDA during the quarter reached Ps. 216.6 million.
Taxes
Taxes recognized by the Company during the quarter were Ps. 26.7 million.
Net Income
Net income for 4Q05 was Ps. 55.2. Earnings per share reached Ps. 0.18 (US$.10 per ADS) compared to Ps. 1.27 (US$0.72 per ADS) reported in the same period of 2004.
RESULTS BY BUSINESS SEGMENT Chicken
Sales of chicken decreased 12.6% during the 4Q05 as a result of a 14.5% decrease in prices compared with 4Q04. The decrease in price was mainly the result of an oversupply condition in the Mexican chicken industry for the quarter. However, the Company's volume of chicken sold during the quarter increased 2.3% in comparison to the same quarter of last year. This increase was due mainly to productivity improvements achieved by the Company and the Sanjor acquisition in the first quarter of this past year.
Table Eggs
Sales of table eggs decreased 12.1% during the 4Q05 as a result of a 10.0% decrease in prices when compared to the same quarter in 2004. Price decreases were due to continued excess supply in the industry.
Balanced Feed
Sales of balanced feed increased 18.8% when compared to the same quarter of last year as a result of a 24.5% increase in volume, which was partially offset by a 4.6% decrease in prices over the same period. The increased volume was the result of strategies implemented by the Company in this line of business, while the decrease in prices is attributable to lower feed ingredient costs.
Swine and Other Lines
Volume sold decreased 0.84%, while sales of swine decreased 15.1%. The decrease is a result of the 14.4% reduction in prices of swine compared to 4Q04 due to larger supplies in the Mexican market.
FULL YEAR 2005 RESULTS
Net Sales
Net sales for the full year 2005 were Ps. 14,437.4 million compared to Ps. 13,694.0 million reported for the same period of 2004. The change represents an increase of 5.4%, primarily driven by a 7.2% increase in sales of chicken and a 14.0% increase in balanced feed. The increase was partially offset by a 14.1% decrease in table egg sales and a 3.7% decrease in swine sales. The increase in total sales was mainly the result of volume increases in the main product lines, as well as price increases in chicken during the first half of the year.
Net Sales by Product Line FULL YEAR 2004 FULL YEAR 2005
% %
CHICKEN 78.82 80.12
EGGS 10.66 8.68
BALANCED FEED 6.62 7.16
SWINE AND OTHER LINES 3.90 4.04
TOTAL COMPANY 100.00% 100%
Operating Results
Bachoco's gross margin reached 27.9% during the full year of 2005, an important improvement when compared to the 19.3% reported in the same period of 2004. The strong improvement was attributable to a reduction in the unit cost of sales for the main product lines and better pricing in the chicken product line during the first three quarters. The Company's operating margin was 15.1%, much better than the 6.8% experienced in the same period of 2004. EBITDA during the full year 2005 reached Ps. 2,642.6 million.
Taxes
The taxes recognized by the Company during the year were Ps. 402.8 million.
Net Income
Net income for the full year 2005 was Ps. 1,775.9 million. Earnings per share reached Ps. 5.92 (US$3.34 per ADS) compared to Ps. 2.42 (UD$1.37 per ADS) reported for the same period of 2004.
Balance Sheet
The Company maintained a healthy financial structure at the end of the fourth quarter of 2005. Liquidity remained solid with cash and cash equivalents of Ps. 3,167.7 million as of December 31, 2005, while debt was Ps. 144.6 million during the same year.
CAPEX during the full year 2005 of Ps. 800.6 million, including acquisitions, was financed entirely with resources generated by the Company's operations.
Company Description
Industrias Bachoco S.A. de C.V. is Mexico's leading producer and processor of poultry products with over 700 production and distribution facilities throughout the country. The Company is also Mexico's second largest producer of table eggs. It sells swine to meat packers for the production of pork products and is an important player in the balanced feed industry in Mexico. The Company posted net sales of US$1.36 billion for 2005 divided among the Company's four main product lines as follows: 80.1% chicken and chicken- related products, 8.7% table eggs, 7.2% balanced feed, and 4.0% swine and other lines.
Industrias Bachoco's shares are listed on the Mexican Stock Exchange and its American Depositary Shares (ADS) are listed on the New York Stock Exchange. One ADS represents six units, each consisting of one Series B and one Series L Share. For more information, please visit Bachoco's website at http://www.bachoco.com.mx/ .
This press release contains certain forward-looking statements that are subject to a number of uncertainties, assumptions and risk factors that may influence its accuracy. Actual results may differ. Factors that could cause these projections to differ include, but are not limited to: supply and demand, industry competition, environmental risks, economic and financial market conditions in Mexico and operating cost estimates. For more information regarding Bachoco and its outlook, please contact the Company's Investor Relations Department.
INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Millions of constant pesos as of December 31, 2005, and millions of
U.S. dollars, except per share data)
Three Months
Dec. 31, Dec. 31, Dec. 31,
2005(1) 2005 2004
Net Sales US$ 308 Ps. 3,271 Ps. 3,619
Cost of Sales 252 2,675 2,689
Gross Profit 56 596 931
Selling, general and
administrative expenses 47 500 437
Operating Income 9 96 494
Comprehensive
Financing Cost (Income)
Interest Expense (Income) (3) (37) (19)
Foreign Exchange Loss (Gain) 4 38 13
Gain from Monetary Position 3 28 8
Total Comprehensive
Financing Cost (Income) 3 29 2
Other Income Net (0) (5) (51)
Income before Provisions
for Income Tax, Employee
Profit Sharing and
Minority Interest 6 62 441
Provisions for:
Income Tax, Asset Tax and
Employee Profit Sharing (1) (12) (12)
Deferred Income Taxes (1) (15) (64)
Income before Minority Interest 3 35 365
Minority Interest (0) (1) 1
Net Income 3 34 366
Effects of Bulletin E-1 2 21 15
Net income after Bulletin E-1 5 55 381
Weighted Average
Units Outstanding (Thousand) 299,540 299,540 299,600
Net Income per Unit 0.10 0.18 1.27
Dividend per Unit -- -- --
Full Year
Dec. 31, Dec. 31, Dec. 31,
2005(1) 2005 2004
Net Sales US$ 1,358 Ps. 14,437 Ps. 13,694
Cost of Sales 979 10,406 11,054
Gross Profit 379 4,032 2,640
Selling, general and
administrative expenses 174 1,850 1,705
Operating Income 205 2,182 935
Comprehensive
Financing Cost (Income)
Interest Expense (Income) (15) (165) (78)
Foreign Exchange Loss (Gain) 12 123 (32)
Gain from Monetary Position 5 54 15
Total Comprehensive
Financing Cost (Income) 1 12 (95)
Other Income Net (1) (12) (122)
Income before Provisions
for Income Tax, Employee
Profit Sharing and
Minority Interest 203 2,157 908
Provisions for:
Income Tax, Asset Tax and
Employee Profit Sharing (29) (313) (25)
Deferred Income Taxes (8) (90) (144)
Income before Minority Interest 165 1,754 740
Minority Interest (0) (2) 2
Net Income 165 1,753 742
Effects of Bulletin E-1 2 23 (16)
Net income after Bulletin E-1 167 1,776 726
Weighted Average
Units Outstanding (Thousand) 299,847 299,847 299,629
Net Income per Unit 3.34 5.92 2.40
Dividend per Unit 0.08 0.82 0.86
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.628 per U.S. dollar,
the noon buying rate at December 31, 2005.
INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Millions of constant pesos as of December 31, 2005, and millions of
U.S. dollars, except per share data)
Dec. 31, Dec. 31, Dec. 31,
2005(1) 2005 2004
ASSETS
Current Assets:
Cash and Cash Equivalents US$ 298 Ps. 3,168 Ps. 2,416
Accounts Receivable less
Allowance for Doubtful Accounts 39 413 392
Inventories 217 2,311 1,679
Other Current Assets 29 303 238
Total Current Assets 583 6,195 4,726
Net Property, Plant
and Equipment 818 8,698 8,843
Other Non Current Assets 34 365 315
Total Non Current Assets 853 9,063 9,158
TOTAL ASSETS 1,436 15,257 13,885
LIABILITIES
Current Liabilities:
Notes Payable to Banks 9 93 103
Trade Accounts Payable 41 438 461
Other Accrued Liabilities 24 254 214
Total Current Liabilities 74 784 778
Long-Term Debt 5 52 75
Labor Obligations 8 80 56
Deferred Income Taxes and Others 174 1,853 1,737
Total Long-Term Liabilities 187 1,985 1,868
TOTAL LIABILITIES 261 2,770 2,647
STOCKHOLDERS' EQUITY
Capital Stock 192 2,040 2,125
Premium in Public
Offering of Shares 58 612 670
Retained Earnings 1,185 12,590 12,108
Net Income for the Year 163 1,735 726
Deficit from Restatement
of Stockholders' Equity (323) (3,430) (3,280)
Reserve for Repurchase of Shares 20 208 158
Minimum Seniority Premium
Liability Adjustment -- -- (1)
Effect of Deferred Income Taxes (123) (1,311) (1,311)
Total Majority
Stockholder's Equity 1,171 12,445 11,195
Minority Interest 4 43 42
TOTAL STOCKHOLDERS' EQUITY 1,175 12,488 11,238
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 1,436 15,257 13,885
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.628 per U.S. dollar,
the noon buying rate at December 31, 2005.
INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Financial Position
(Millions of constant pesos as of December 31, 2005, and millions of
U.S. dollars, except per share data)
Dec. 31, Dec. 31, Dec. 31,
2005(1) 2005 2004
Operating Activities:
Net Income US$ 167 Ps. 1,778 Ps. 724
Adjustments to Reconcile
Net Income to Resources
Provided by
Operating Activities:
Depreciation and Others 43 459 436
Changes in Operating
Assets and Liabilities (44) (467) 329
Deferred Income Taxes 11 116 5
Resources Provided by
Operating Activities 177 1,886 1,494
Financing Activities:
Increase of Capital Stock (0) (0) (0)
Proceeds from Long-term Debt (0) (0) 4
Proceeds from Short-term Debt 15 164 329
Repayment of Long-term Debt
and Notes Payable (18) (191) (311)
Decrease in Long-term Debt
in Constant Pesos (1) (6) (8)
Cash Dividends Paid (23) (244) (255)
Resources Provided by (Used in)
Financing Activities (26) (278) (242)
Investing Activities:
Acquisition of Property,
Plant and Equipment (75) (801) (447)
Minority Interest 0 0 (2)
Others (5) (57) (107)
Resources Used in
Investing Activities (81) (857) (557)
Net (Decrease) Increase in
Cash and Cash Equivalents 71 752 696
Cash and Cash Equivalents
at Beginning of Period 227 2,416 1,706
Cash and Cash Equivalents
at End of Period US$ 298 Ps. 3,168 Ps. 2,401
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.628 per U.S. dollar,
the noon buying rate at December 31, 2005.
