CELAYA, Mexico, July 23 /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 second quarter and first half ended June 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: (In millions of pesos) 2Q-09 2Q-08 1H-09 1H-08 Net sales Ps. 5,991.1 4,987.5 11,857.9 9,730.8 Gross profit Ps. 1,455.4 894.6 2,557.0 1,719.9 Gross margin 24.3% 17.9% 21.6% 17.7% Operating Income Ps. 858.6 311.6 1,353.4 556.0 Operating margin 14.3% 6.2% 11.4% 5.7% EBITDA Ps. 1,019.3 460.3 1,673.6 853.7 EBITDA margin 17.0% 12.7% 14.1% 8.8% Net majority income Ps. 695.7 194.4 969.7 425.2 Net margin 11.6% 3.9% 8.2% 4.4%
- The Company registered a 20.1% increase in sales when compared with the same quarter of 2008, recording its highest sales level for any given quarter.
- Bachoco's sales increased across all its business lines, and were particularly strong for chicken and eggs.
- EPS for the quarter were Ps. 1.16 (US$ 1.06 per ADS) versus Ps. 0.32 (US$ 0.30 per ADS) in 2Q08.
CEO's Comments:
Cristobal Mondragon, Bachoco's CEO, stated: "Even when the Mexican economy continued slowing down and is expected to record one of the worst performing quarters ever, the Company's performance remained strong and we continued delivering positive results to our holders by taking the opportunities the industry offered.
"The poultry market showed a good balance between supply and demand, which together with our focus on properly serving our market channels, allowed us to record the highest sales level in a quarter.
"Our operating margin improved and good results in the quarter were boosted by the good operating environment, a more stable Mexican peso, and the strategies implemented by the Company, such as productivity improvements, optimizing sales mix and control of our expense.
"Furthermore, our comprehensive financial result also improved also during this quarter as a result of the restructuring of our derivatives portfolio and the maturity of most of the instruments we had in place," concluded Mr. Mondragon.
SECOND QUARTER 2009 RESULTS Net Sales
Net sales for the second quarter amounted to Ps. 5,991.1 million, 20.1% above the Ps. 4,987.5 million reported in 2Q08. This increase was mainly driven by higher sales in the main business lines: chicken sales rose 20.0%, while table eggs sales jumped 30.9%, and balanced feed sales increased 11.3%.
Net sales 2Q09 (%) 2Q08 (%) Chicken 77.73 77.83 Eggs 10.21 9.36 Balanced feed 6.83 7.37 Swine 0.92 1.10 Other lines 4.31 4.34 100.00% 100.00% Operating Results
Bachoco's second quarter gross margin was 24.3%, higher than the 17.9% reached in the same quarter of 2008. The increase in the gross margin is attributed to the 18.4% increase in sale prices, which was partially offset by the 10.8% increase in the cost of sales.
The Company had an operating profit of Ps. 858.6 million, compared to an operating profit of Ps. 311.6 million in the same quarter of 2008; the operating margin of 14.3% in the second quarter 2009, was above the 6.2% margin of the same 2008 period.
Operating expenses amounted to Ps. 596.7 million in the quarter. Even when operating expenses increased by 2.4% during the quarter, operating expenses as a percentage of sales decreased to 10.0%, when compared to the same period of 2008.
The EBITDA result was positive and amounted to Ps. 1,019.3 million, and was 121.4% above the Ps. 460.3 million recorded in the same period of 2008.
Taxes Total taxes recognized for the second quarter were Ps. 168.6 million. Comprehensive Financial Income (Cost)
The Company's financial comprehensive income was Ps. 13.6 million during the quarter, compared to a financial comprehensive cost of Ps. 47.5 million reported in the same quarter last year.
Net Majority Income
Net majority income for the second quarter totaled PS. 695.7 million, or Ps. 1.16 per share (US$1.06 per ADS), compared to a net majority income of Ps. 194.4 million, or Ps. 0.32 per share (US$0.30 per ADS) reported in the same 2008 period.
RESULTS BY BUSINESS SEGMENT Chicken
Results for the chicken business line remained strong during the second quarter. Sales of chicken products increased 20.0% as chicken prices rose 18.3% and volume grew 1.4%. During this quarter demand for chicken products was stable in the Mexican market.
Table Eggs
Sales of eggs significantly increased by 30.9% during the second quarter as egg prices rose 31.7% from the previous year, but were partially offset by a slight volume decrease of 0.6% related to the production adjustment made by the Company. Demand for egg products remained strong in the Mexican market.
Balanced Feed
During the second quarter the balanced feed business showed signs of recovery. Sales of balanced feed increased 11.3%, mainly due to an 8.9% increase in prices and a 2.3% increase in volume. This business line was strongly affected during the past quarters given the high cost of raw material prices.
Swine
Swine sales increased 0.3% from 2Q08, mainly driven by a 0.9% increase in volume, which was partially offset by a 0.6% decrease in swine prices.
Other Lines
Sales of other lines increased 19.4% when compared with same quarter of 2008; The main products sold were by-product sales, such as poultry manure.
FIRST HALF OF 2009 Net Sales
Net sales for the first half of 2009 amounted to Ps. 11,857.9 million, and were 21.9% above the Ps. 9,730.8 million reported in 1H08. The increase was mainly driven by the 24.0% increase in chicken sales, 20.2% in table eggs sales, 19.8% in swine sales and 1.7% increase in sales of balanced feed.
Net sales 1H 2009 1H 2008 (%) (%) Chicken 78.35 77.02 Eggs 10.21 10.35 Balanced feed 6.31 7.57 Swine 0.97 0.98 Other lines 4.16 4.08 100.00% 100.00% Operating Results
Bachoco's gross margin for the first half of the year was 21.6%, higher than 17.7% in 1H08, and was mainly attributed to higher sales in all of our business lines. The Company's operating profit was Ps. 1,353.4 million, compared to an operating profit of Ps. 556.0 million reached in the same period of 2008. EBITDA was Ps. 1,673.6 million, 96.0% more than the Ps. 853.7 million recorded in the 1H08. EBITDA margin for the first half of 2009 was 14.1%.
Taxes Taxes for the first half of the year were Ps. 235.7 million. Net Majority Income
Net majority income for the first half of the year was Ps. 969.7 million, or Ps. 1.62 per share (US$1.47 per ADS), compared to net income of Ps. 425.2 million, or Ps. 0.71 per share (US$0.65 per ADS) reported in the same 2008 period.
Balance Sheet
Liquidity is solid with cash and cash equivalents amounting to Ps. 2,802.4 million as of June 30, 2009. The total debt outstanding was Ps. 640.2 million as of June 30, 2009.
Capital Expenditures
CAPEX during the first half of 2009 amounted to Ps. 223.0 million, and was entirely financed with internally generated resources.
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 June As of June 30, 30, ASSETS Current assets Cash and cash equivalents $ 213 Ps 2,802 Ps 2,879 Total accounts receivable 103 1,353 1,283 Inventories 307 4,039 4,473 Other current assets 15 202 -- Total current assets 638 8,396 8,634 Net property, plant and equipment 806 10,620 10,637 Other non current assets 26 336 374 TOTAL ASSETS $1,469 Ps 19,352 Ps 19,645 LIABILITIES Current liabilities Notes payable to banks 31 405 67 Accounts payable 96 1,261 1,348 Other taxes payable and other accruals 38 507 611 Total current liabilities 165 2,172 2,025 Long-term debt 18 236 73 Labor obligations 7 91 56 Deferred income taxes and others 155 2,047 1,938 Total long-term liabilities 180 2,374 2,066 TOTAL LIABILITIES $ 345 Ps 4,546 Ps 4,091 STOCKHOLDERS' EQUITY Majority stockholder's equity: Capital stock 174 2,295 2,295 Paid-in capital 57 744 660 Reserve for repurchase of shares 12 159 244 Retained earnings 804 10,591 11,418 Net majority income of the year 74 970 425 Deficit from restatement of stockholder's equity -- -- -- Derivate financial instruments -- -- 469 Total majority stockholder's equity 1,121 14,759 15,510 Minority interest 4 47 44 TOTAL STOCKHOLDERS' EQUITY 1,124 14,807 15,554 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,469 Ps 19,352 Ps 19,645 (1) For reference, in millions of U.S. dollars using an exchange rate of $13.17 as of June 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- SECOND QUARTER FIRST HALF U.S.D. Mexican Pesos U.S.D. Mexican Pesos 2009(1) 2009(2) 2008(2) 2009(1) 2009(2) 2008(2) Net sales $ 455 Ps 5,991 Ps 4,987 US 900 Ps 11,858 Ps 9,731 Cost of sales 344 4,536 4,093 706 9,301 8,011 Gross profit (loss) 111 1,455 895 194 2,557 1,720 Selling, general and administrative expenses 45 597 583 91 1,204 1,164 Operating income (loss) 65 859 312 103 1,353 556 Comprehensive financing (cost) income 1 14 (47) (8) (106) (17) Interest income 2 23 31 6 73 98 Interest expense and financing expenses (2) (21) (49) (3) (44) (70) Foreign exchange gain (loss), net (2) (23) (30) (1) (18) (45) Other financial income (expense) net 3 35 -- (9) (117) -- Other income (expense) net (0) (3) (14) (3) (35) 6 Income before income tax, asset tax 66 869 250 92 1,212 545 Total income taxes 13 169 54 18 236 117 Income tax, asset tax 2 28 24 4 51 127 Deferred income taxes 11 141 30 14 184 (9) Net income $ 53 Ps700 Ps196 74 976 428 Minority net income 0 5 2 0 6 2 Majority net income 53 696 194 74 970 425 Weighted average shares outstanding (in thousands) 599,891 599,891 600,000 599,918 599,918 600,000 Net majority Income per share (in U.S.D per ADS) 1.06 1.16 0.32 1.47 1.62 0.71 (1) For reference, in millions of U.S. dollars using an exchange rate of $13.17 as of June 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 U.S.D. As of June 30, 2009(1) 2009(2) 2008(2) NET MAJORITY INCOME BEFORE INCOME TAX $ 92 Ps. 1,212 Ps. 545 ITEMS THAT DO NOT REQUIRE CASH: (20) (262) (142) Other Items (20) (262) (142) ITEMS RELATING TO INVESTING ACTIVITIES: 22 296 291 Depreciation and others 24 320 298 Income (loss) on sale of plant and equipment (1) (17) (4) Other Items (0) (6) (2) ITEMS RELATING TO FINANCING ACTIVITIES: 9 117 168 Interest income (expense) 3 44 70 Other Items 6 73 98 NET CASH GENERATED FROM NET INCOME BEFORE TAXES $104 Ps. 1,364 Ps. 862 CASH GENERATED OR USED IN THE OPERATION 1 16 (72) Decrease (increase) in accounts receivable 11 145 88 Decrease (increase) in inventories 82 1,079 (89) Increase (decrease) in accounts payable (55) (722) 183 Income taxes paid (37) (487) (254) NET CASH FLOW FROM FINANCING ACTIVITIES $105 Ps. 1,380 Ps. 790 INVESTING ACTIVITIES NET CASH FLOW FROM INVESTING ACTIVITIES (24) (320) (612) Acquisition of property, plant and equipment (17) (223) (686) Proceeds from sales of property plant and equipment (1) (11) 38 Other Items (7) (87) 36 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES $ 80 Ps. 1,059 Ps. 178 FINANCING ACTIVITIES Net cash provided by financing activities: (17) (229) (339) Proceeds from loans 45 588 123 Principal payments on loans (44) (573) (94) Dividends paid (9) (125) (118) Other items (9) (119) (251) NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 63 830 (161) CASH AND INVESTMENTS AT THE BEGINNING OF YEAR 150 1,972 3,040 CASH AND INVESTMENTS AT END OF PERIOD $213 Ps. 2,802 Ps. 2,879 (1) For reference, in millions of U.S. dollars using an exchange rate of $13.17 as of June 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 June 30, 2009 Table 1 Type of Financial Instrument Objective of Notional The instrument Forwards, knock out forwards, Hedge and $ 579,480 puts and buying and selling negotiation TARNS of USD under different amounts and conditions* Corn Futures and Hedge $ 279,352 soybean meal Futures** Options for corn*** Hedge and $ 17,569 negotiation Options for soybean meal**** Hedge and $ 51,292 negotiation Type of Financial Instrument Value of the Related Commodity 2Q-2009 1Q-2009 Forwards, knock out forwards, $13.17 $14.21 puts and buying and selling TARNS of USD under different amounts and conditions* Corn Futures and Corn of Sep and Dec, Corn: $4.0475 USD/ soybean meal Futures** $3.5450 and $3.6725 per bushel for May. USD/bushel Soybean meal: respectively. $295.3 USD/ton Soybean meal of Aug for May and Sep $374.30 and $339.30 USD/ton. Options for corn*** Corn: $3.5450 USD/ Corn: $4.0475, per bushel for Sep $4.1475, $4.240 and $3.6725 for and $4.3575 USD/ December per bushel for May, Jul, Sep and Dec, respectively Options for soybean meal**** Soybean meal: $374.30 Soybean meal: $295.3, USD/per ton for $291.6, $285.3 and Aug and $314.3 and $265.4 USD/ton $306.30 USD/ton for for May, Jul, Aug Oct and Dec and Oct respectively respectively Type of Financial Instrument Reasonable Value Amounts Guaranties 2Q-2009 1Q-2009 Due by Required Year Forwards, knock out forwards, -$ 74,408 -$ 440,456 puts and buying and selling TARNS of USD under different amounts and conditions* Corn Futures and -$ 22,565 -$ 4,202 The deals soybean meal Futures** 2009 consider the Options for corn*** $ 84 $ 992 possibility of margin calls but not another kind of guaranty Options for soybean meal**** $ 7,044 -$ 534
* None of the financial instruments exceed 5% of total assets as of June 30, 2009
* The 52.3% of the instruments will be due in 2009 and the rest during the first half of 2010.
** All the instruments will be due in 2009 *** All the instruments will be due in 2009 **** All 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. Thousand of Mexican Pesos, as of June 30, 2009 Table 2 Value of the Related Kind of Financial Instrument Reasonable Commodity Value As /reference value of March 31 3% 5% 10% Forwards, knock out forwards, -$ 74,408 $ 13.57 $ 13.83 $ 14.49 puts and buying and selling TARNS of USD under different amounts and conditions* 10% 15% 20% Corn Futures and -$ 22,565 $ 3.19 $ 3.01 $ 2.84 soybean meal Futures** $336.87 $318.16 $299.44 Options for corn*** $ 84 $ 3.19 $ 3.01 $ 2.84 Options for soybean meal**** $ 7,044 $336.87 $318.16 $299.44 Kind of Financial Instrument Effect on the Effect on the Income Cash Flow***** Statement 3% 5% 10% Forwards, knock out forwards, Direct -$60,008 -$50,648 $95,740 puts and buying and selling TARNS of USD under different amounts and conditions* 10% 15% 20% Corn Futures and soybean meal -$48,243 -$61,083 -$73,922 Futures** Options for The effect will -$ 368 -$ 594 -$ 820 corn*** materialize as the inventory is consumed. Options for soybean meal**** -$ 16 -$ 3,547 - $7,077 * The reference value is the exchange rate of the Mexican peso and USD, $13.17 pesos per USD as of June 30 of 2009. ** The reference value is the future in USD per bushel, here referenced to corn, $3.5450 for September and $374.3 USD/ton for Aug for Soybean meal. *** The reference value is the future in USD per bushel, here references to corn for September 2009. **** The reference value is the future in USD per ton, here references to Soybean meal for August 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. A negative value means an unfavorable effect for the Company. 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/
