CELAYA, Mexico, April 20 /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 corresponding to the first quarter ended March 31, 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: - The Company recorded, once again, the highest sales level for a quarter in the Company's history, with total sales increasing 23.7% when compared with the same quarter of 2008. - Bachoco sales rose across its main business lines: 28.2% in chicken, 11.0% in table eggs and 45.9% in swine, as supply conditions improved in the market. - Operating profit increased 102.5% during the quarter, while EBITDA was 66.3% higher at Ps. 654.3 million in 1Q09 from Ps. 393.3 million in 1Q08. - EPS was Ps. 0.46 (US$ 0.39 per ADS) versus Ps. 0.38 (US$ 0.32 per ADS) in 1Q08. CEO's Comments:
Cristobal Mondragon, Bachoco's CEO, stated, "During the quarter, the Mexican economy continued slowing down following the global trend, and we continued to experience a further depreciation of the Mexican peso against the U.S. dollar.
"In our industry, however, there was a favorable balance between supply and demand that allowed us to transfer part of our past cost increases to our prices in our main product lines. This, combined with our internal efforts to serve our clients properly by optimizing the product mix (we made adjustments to our supply relative to the same quarter of 2008), and improved efficiency, allowed us to increase total sales to a new historical record and achieve positive results in terms of operating and net income.
"In terms of EBITDA, we achieved a positive margin of 11.2%, larger than the 8.3% margin registered in 1Q08.
"As we reported last quarter, our comprehensive financial cost continued to be affected by the depreciation of the Mexican peso against the U.S. dollar given our hedging position. However, we have already restructured most of our derivative portfolio to mitigate this effect and expect minor effects in the second half of the year.
"We expect to continue delivering positive results in the second quarter of the year," concluded Mr. Mondragon.
FIRST QUARTER 2009 RESULTS Net Sales
Net sales for the first quarter were Ps. 5,866.8 million, 23.7% above the Ps. 4,743.3 million reported in 1Q08. This increase was mainly driven by higher sales in the main business lines: chicken sales rose 28.2%, while table eggs sales increased 11.0%, and swine sales rose 45.9%.
Net Sales 1Q09 (%) 1Q08 (%) CHICKEN 79.0 76.2 EGGS 10.2 11.4 BALANCED FEED 5.8 7.8 SWINE 1.0 0.9 OTHER LINES 4.0 3.7 TOTAL COMPANY 100.0 100.0 Operating Results
Bachoco's first quarter gross margin was 18.8%, higher than the 17.4% reached in the same quarter of 2008. The increase in the gross margin is attributed to a 34.2% increase in sales prices, which partially offset the 21.6% increase in our cost of sales, mainly driven by higher cost inventories of corn and soy bean meal.
The Company had an operating profit of Ps. 494.8 million, compared to an operating profit of Ps. 244.4 million in the same quarter 2008. Said result represents an operating margin of 8.4% for the first quarter 2009, compared to an operating margin of 5.2% in the same period of 2008.
Operating expenses amounted to Ps. 606.8 million. Even when operating expenses increased by 4.5% during the first quarter, operating expenses as a percentage of sales decreased when compared to the same period of 2008.
EBITDA was positive and amounted to Ps. 654.3 million, 66.3% above the Ps. 393.3 million recorded in the same period of 2008.
Taxes
Total taxes recognized by the Company during the quarter were Ps. 67.1 million.
Comprehensive Financial Income (Cost)
The Company's financial comprehensive cost amounted to Ps. 119.8 million during the quarter, compared to a financial comprehensive income of Ps. 30.6 million reported in the same quarter last year.
Net Income
Net majority income for the first quarter was Ps. 273.9 million, or Ps. 0.46 per share (US$0.39 per ADS), compared to a net majority income of Ps. 230.8 million, or Ps. 0.38 per share (US$0.32 per ADS) reported in the same period 2008.
Balance Sheet
Cash and cash equivalents were Ps. 2,448.8 million as of March 31, 2009, compared with Ps. 3,162.0 million reported on the same date of 2008. Said decrease was mainly driven by larger inventories. The total debt outstanding as of March 31, 2009 amounted to Ps. 616.8 million.
RESULTS BY BUSINESS SEGMENT Chicken
Results for the chicken business line were strong during the first quarter. Sales of chicken products increased 28.2% as chicken prices rose 30.0%; however, this result was partially offset by a 1.3% decrease in volume from the previous year. During this quarter the Company was able to transfer part of its cost increases to chicken prices.
Table Eggs
Sales of eggs increased by 11.0% during the first quarter as egg prices rose 17.3% from the previous year, but were partially offset by a 5.4% decrease in volume mainly driven by the adjustment in the production level of the company.
Balanced Feed
The balanced feed business line remained affected by higher costs in the inventories of raw materials. Sales of balanced feed decreased by 8.0%, while balanced feed prices increased by 19.6%, but were offset by a strong decrease in volume sold of 23.1%, as demand in the sector declined.
Swine
Demand and supply were stable during this quarter. Swine sales significantly increased by 45.9% from 1Q08, and were driven by a 50.3% increase in swine prices, partially offset by a 2.9% decrease in volume.
Other Lines
Sales of other lines increased 30.1% mainly due to higher by-product sales, such as poultry manure.
Outlook - The Company expects the peso-USD exchange rate to remain volatile. - The worldwide decrease in the costs of raw material will benefit the Company's cost of sales during 2009. - We expect a good balance between supply and demand in 2009's second quarter. 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.
INDUSTRIAS BACHOCO, S.A.B. DE C.V. Consolidated Statements of Income -unaudited- FIRST QUARTER U.S.D. Mexican Pesos 2009(1) 2009(2) 2008(2) Net sales $ 413 Ps 5,867 Ps 4,743 Cost of sales 335 4,765 3,918 Gross profit (loss) 78 1,102 825 Selling, general and administrative expenses 43 607 581 Operating income (loss) 35 495 244 Comprehensive financing (cost) income (8) (120) 31 Interest income 36 512 67 Interest expense and financing cost 45 637 22 Foreign exchange gain (loss), net 0 5 (14) Loss on net monetary position -- -- -- Other income (expense) net (2) (32) 20 Income before income tax, asset tax 24 343 295 Total income taxes 5 67 63 Income tax, asset tax 2 24 102 Deferred income taxes 3 43 (39) Net income $ 19 Ps 276 Ps 231 Minority net income 0 2 1 Majority net income 19 274 231 Weighted average shares outstanding (in thousands) 600,000 599,945 600,000 Net majority Income per share (in U.S.D per ADR) 0.39 0.46 0.38 (1) For reference, in millions of U.S. dollars using an exchange rate of $14.21 as of March 31, 2009 (2) Millions of nominal pesos 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 March 31 March 31 ASSETS Current assets Cash and cash equivalents $ 172 Ps 2,449 Ps 3,162 Total accounts receivable 94 1,332 1,270 Inventories 272 3,862 4,098 Other current assets -- -- -- Total current assets 538 7,643 8,530 Net property, plant and equipment 752 10,684 10,488 Other non current assets 36 516 373 TOTAL ASSETS $ 1,326 Ps 18,842 Ps 19,391 LIABILITIES Current liabilities Notes payable to banks 17 235 59 Accounts payable 77 1,099 1,215 Other taxes payable and other accruals 27 381 412 Total current liabilities 121 1,714 1,686 Long-term debt 27 382 44 Labor obligations 6 86 57 Deferred income taxes and others 163 2,317 2,102 Total long-term liabilities 196 2,785 2,202 TOTAL LIABILITIES $ 317 Ps 4,499 Ps 3,888 STOCKHOLDERS' EQUITY Majority stockholder's equity: Capital stock 161 2,295 2,295 Pain-in capital 52 744 660 Reserve for repurchase of shares 11 158 244 Retained earnings 762 10,829 11,802 Net majority income of the year 19 274 231 Deficit from restatement of stockholder's equity -- -- -- Derivate financial instruments -- -- 226 Total majority stockholder's equity 1,006 14,299 15,458 Minority interest 3 45 46 TOTAL STOCKHOLDERS' EQUITY 1,009 14,344 15,504 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,326 Ps 18,842 Ps 19,391 (1) For reference, in millions of U.S. dollars using an exchange rate of $14.21 as of March 31, 2009 (2) Millions of nominal pesos Industrias Bachoco, S.A.B. de C.V. Condensed Consolidated Statements of Changes in Financial Position U.S.D. Mexican Pesos 2009(1) 2009(2) 2008(2) Operating activities: Net income $ 20 Ps. 276 Ps. 231 Adjustments to reconcile net income to resources Provided by operating activities: Depreciation and others 11 157 148 Changes in operating assets and liabilities 44 608 412 Deferred income taxes (25) (347) (274) Resources provided by operating activities $50 Ps. 694 Ps. 518 Financing activities: Increase of capital stock (0) (0) 0 Proceeds from long and short- term debt 1 15 40 Repayment of Long-term debt and notes payable (2) (24) 47 Decrease in long-term debt in constant pesos 0 0 (94) Cash dividends paid -- -- -- Resources provided by (used in) financing activities $ (1) Ps. (9) Ps. (7) Investing activities: Acquisition of property, plant and equipment (10) (140) (368) Minority interest 0 2 (1) Others (5) (70) (20) Resources used in investing activities $ (15) Ps. (209) Ps. (389) Net (decrease) increase in cash and cash equivalents $34 Ps. 476 Ps. 122 Cash and cash equivalents at beginning of period 143 1,972 3,040 Cash and cash equivalents at end of period $ 177 Ps. 2,448 Ps. 3,162 (1) For reference, in millions of U.S. dollars using an exchange rate of $14.21 as of March 31, 2009 (2) Millions of nominal pesos Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of March 31, 2009 Table 1 Type of Financial Instrument Objective of the Notional Instrument Forwards, knock out forwards, Hedge and $1,165,220 puts and buying and negotiation selling TARNS and USD under different amounts and conditions* Corn futures and Hedge $ 4,534 soybean meal futures** Options for corn*** Hedge and $ 13,412 negotiation Options for soybean meal**** Hedge and $ 8,572 negotiation Type of Financial Value of the Related Community Instrument 1Q-2009 4Q-2008 Forwards, knock out forwards, $14.21 $13.82 puts and buying and selling TARNS and USD under different amounts and conditions* Corn futures and Corn of May, $4.0475 Corn of March, $4.07 soybean meal futures** USD/bushel. USD/bushel. Soybean meal $295.3 Soybean meal $300.5 per ton for May and $299.8 USD per ton for January and March, respectively Options for corn*** Corn: $4.0475, Corn of March $4.1475, $4.240 and $4.07 USD per $4.3575 USD/per bushel bushel for May, July, September and December, respectively Options for soybean meal**** Soybean meal: $295.3, Soybean meal $300.5 $291.6, $285.3 and and $299.8 USD $265.4 USD/per bushel per ton for January for May, July, August and March, and October, respectively respectively Type of Financial Reasonable Value Amounts Due Guaranties Instrument by Year Required 1Q-2009 4Q-2008 Forwards, knock -$440,456 -$808,441 out forwards, puts and buying and selling TARNS of USD under different amounts and conditions* Corn futures and -$ 4,534 -$ 1,150 soybean meal futures** The deals consider 2009 the possibility Options for of margin calls corn*** $ 992 - $55,191 but not another kind of guaranty Options for -$ 534 - $3,286 soybean meal**** * All of the financial instruments do not exceed 5% of total assets as of March 31, 2009 * All instruments will be due in 2009 ** All instruments will be due in 2009 *** All instruments will be due in 2009 **** All 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 March 31, 2009 Table 2 Kind of Financial Reasonable Value Value of the Related Instrument As of March 31 Commodity/Reference Value 3% 6% 10% Forwards, knock -$440,456 $ 14.64 $ 15.06 $ 15.63 out forwards and puts and buying and selling TARNS of USD under different amounts and conditions* 10% 15% 20% Corn futures and -$ 4,534 $ 3.64 $ 3.44 $ 3.24 soybean meal futures $265.77 $251.01 $236.24 Options for corn** $ 992 $ 3.64 $ 3.44 $ 3.24 Options for soybean meal*** -$ 534 $265.77 $251.01 $236.24 Kind of Financial Effect on the Effect on the Cash Flow**** Instrument Income Statement 3% 6% 10% Forwards, knock Direct -$456,996 -$500,946 -$514,116 out forwards and puts and buying and selling TARNS of USD under different amounts and conditions* 10% 15% 20% Corn futures and -$ 4,534 -$ 4,534 -$ 4,534 soybean meal futures Options for corn** The effect will -$ 353 -$ 1,026 -$ 1,699 materialize as the inventory is consumed Options for soybean -$ 1,744 -$ 2,348 -$ 2,953 meal*** * The reference value is the exchange rate of the Mexican peso and USD, $14.21 pesos per USD as of March 31 of 2009 ** The reference value is the future in USD per bushel, here referenced to corn, $4.0475 *** The reference value is the future in USD per ton, here referenced to soybean meal $295.3 **** The company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. A negative value means an unfavorable effect for the Company IR contacts: Daniel Salazar, CFO Claudia Cabrera, IRO Ph. 011 52 (461) 618 3555 inversionistas@bachoco.net In New York: Grayling Lucia Domville Ph. (646) 284-9416 ldomville@hfgcg.com Headquarters: Industrias Bachoco, SAB de CV 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,
+011-52-461-618-3555, inversionistas@bachoco.net; or In New York: Lucia
Domville, Grayling, +1-646-284-9416, ldomville@hfgcg.com, for Industrias
Bachoco
Web site: http://www.bachoco.com.mx/
