CELAYA, Mexico, Oct. 21 /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 ended September 30th, 2010. All figures have been prepared in accordance with Mexican GAAP. Following Mexican Accounting Principles, all data is presented in nominal Mexican pesos.
Highlights: -- The Company registered a 12.2% increase in total sales when compared with the same 2009 quarter. -- Bachoco's EBITDA totaled Ps. 983.8 million, with a margin of 15.6% in 3Q10 vs an EBITDA margin of 3.6% in 3Q09. -- EPS for the quarter were up at Ps. 1.06 (US$ 1.01 per ADS) compared to a net loss per share of Ps. 0.09 (US$ 0.08 per ADS) in 3Q09. CEO's Comments:
Cristobal Mondragon, Bachoco's CEO, stated, "The third quarter of the year was traditionally the weakest quarter for our Company, but this quarter it was quite different. We had a good balance between supply and demand in our chicken business line, which allowed us to capitalize our productivity and supply efforts and achieve stronger results during the third quarter.
"Swine and balanced feed business lines had a good performance, resulting in strong results for this business lines.
"Our egg business line, on the contrary, was affected by lower demand, impacting the volume and sales of these products.
"As a result, we reach a two digit EBITDA for the quarter; and were able to reverse the net loss reported in 3Q09, registering a significant net profit for the quarter.
"Finally, I want to stress that our financial position remains solid with cash and cash equivalents of Ps. 3,778.4 million," concluded Mr. Mondragon.
THIRD QUARTER 2010 RESULTS Net sales 3Q09 (%) 3Q10 (%) --------- -------- -------- Chicken 79.2 83.1 ------- ---- ---- Eggs 9.7 7.6 ---- - - Balanced feed 6.5 5.4 ------------- --- - Swine 1.0 1.3 ----- - - Other lines 3.6 2.6 ----------- - - Total Sales 100.0% 100.0% ----------- ----- ----- Net Sales
Net sales for the quarter amounted to Ps. 6,297.3 million, 12.2% above the Ps. 5,613.6 million reported in the same 2009 quarter. This increase was mainly driven by higher chicken and swine sales, which were partially offset by a decrease in eggs, balanced feed and other business lines sales.
Operating Results
Bachoco's third quarter gross profit was Ps. 1,490.6 million, with a margin of 23.7%, higher than 12.0% margin reported in 3Q09. This result is directly attributed to higher sales in our chicken business as well as lower cost of sales in our main business lines.
The Company registered an operating profit of Ps. 812.1 million, which is also greater than the operating profit of Ps. 35.3 million registered in the same 2009 quarter. The operating margin for the quarter was 12.9%.
EBITDA amounted to Ps. 983.8 million, above the Ps. 207.5 million reported in the same 2009 quarter.
Net Majority Income
Net majority income for the third quarter amounted to PS. 635.1 million, or Ps. 1.06 per share (US$1.06 per ADS), compared to a net majority loss of Ps. 53.1 million, or Ps. 0.09 loss per share (US$0.08 loss per ADS) reported in the same 2009 period.
RESULTS BY BUSINESS SEGMENT Chicken
Sales of chicken products increased 17.7%, when compared to 3Q09, as a result of a 3.0% increase in volume and a 14.2% increase in chicken prices. This strong increase in sales is attributed to a better balance between supply and demand in the Mexican industry as well as a stronger demand for our chicken products.
Table Eggs
Sales of table eggs products decreased by 11.7% during the third quarter, as egg prices decrease 10.3% and volume fell by another 1.6%. This is the result of a lower demand for egg products and the oversupply registered by the industry.
Balanced Feed
Sales of balanced feed decreased 6.5% following a 5.9% decrease in prices and a 0.6% decrease in balanced feed volume sold; nonetheless the Company managed to improve its gross margin from the same quarter of 2009.
Swine
The swine business line registered a solid third quarter. Sales were sound and rose 36.9%, as swine prices increased 26.8% and volume sold rose 7.9% increase in the period. Demand for live swine was stronger during this quarter.
Other Lines
Sales of other lines decreased 18.6% when compared with the same quarter of 2009, as sales of by-products declined.
FIRST NINE MONTHS OF 2010 Net Sales
Net sales for the first nine months of 2010 amounted to Ps. 18,432.6 million, up 5.5% from the Ps. 17,471.5 million reported in the same 2009 period. The increase was mainly driven by the 9.3% increase in chicken sales and, 28.6% in swine sales, both of which were partially offset by the 9.3% decrease in table eggs sales and 7.4% decrease in balanced feed sales.
Net sales Jan-Sep 2009(%) Jan-Sep 2010(%) --------- --------------- --------------- Chicken 78.6 81.5 ------- ---- ---- Eggs 10.0 8.6 ---- ---- - Balanced feed 6.4 5.6 ------------- - - Swine 1.0 1.2 ----- - - Other lines 4.0 3.1 ----------- - - Total Sales 100.0% 100.0% ----------- ----- ----- Operating Results
Bachoco's gross margin for the first nine months of the year was up 21.5%, compared to the 18.5% registered in the same 2009 period, and was mainly attributed to stronger results in our chicken business line.
The Company's operating profit was Ps. 1,937.1 million, compared to an operating profit of Ps. 1,388.7 million reached in the same period of 2009.
EBITDA amounting Ps. 2,449.4 million was, 30.7% higher than the Ps. 1,874.3 million recorded in the first nine months of 2009. EBITDA margin for the first nine months of 2010 was 13.3%.
Taxes Taxes for nine months period were Ps. 402.7 million. Net Majority Income
Net majority income for first nine months of the year was Ps. 1,527.7 million, or Ps. 2.55 per share (US$2.42 per ADS), compared to net income of Ps. 916.5 million, or Ps. 1.53 per share (US$1.45 per ADS) reported in the same 2009 period.
Balance Sheet
Liquidity is solid with cash and cash equivalents amounting to Ps. 3,778.4 million as of September 30, 2010. The total debt outstanding as of September 30, 2010 was Ps. 763.6 million.
Capital Expenditures
CAPEX during the nine months of 2010 amounted to Ps. 233.6 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 A.- Consolidated Balance Sheets Industrias Bachoco, S.A.B. de C.V. Condensed Consolidated Balance Sheets U.S.D. Mexican Pesos ------ ------------- 2010(1) 2010(2) 2009(2) As of As of September 30, September 30, ------------- ------------- ASSETS Current assets Cash and cash equivalents $299 Ps 3,778 Ps 2,260 Total accounts receivable 127 1,609 1,331 Inventories 347 4,388 4,413 Other current assets Total current assets 774 9,775 8,004 Net property, plant and equipment 844 10,661 10,949 Other non current assets 28 353 554 TOTAL ASSETS $1,646 Ps 20,790 Ps 19,507 --- --- --- LIABILITIES Current liabilities Notes payable to banks 17 215 502 Accounts payable 99 1,245 1,255 Other taxes payable and other accruals 51 650 422 Total current liabilities 167 2,110 2,179 Long-term debt 43 549 547 Labor obligations 8 98 95 Deferred income taxes and others 168 2,117 1,932 Total long-term liabilities 219 2,764 2,574 TOTAL LIABILITIES $386 Ps 4,874 Ps 4,753 --- --- --- STOCKHOLDERS' EQUITY Majority stockholder's equity: Capital stock 182 2,295 2,295 Paid-in capital 59 745 744 Reserve for repurchase of shares 13 159 159 Retained earnings 882 11,139 10,592 Net majority income of the year 121 1,528 917 Deficit from restatement of stockholder's equity - - - Derivate financial instruments - - - Total majority stockholder's equity 1,256 15,866 14,706 Minority interest 4 50 48 TOTAL STOCKHOLDERS' EQUITY 1,260 15,916 14,754 ----- ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,646 Ps 20,790 Ps 19,507 -------------- ------ --- ------ --- ------ (1) For reference, in millions of U.S. dollars using an exchange rate of $12.63 Source: Mexico's National Bank, as of September 30, 2010. (2) Millions of Mexican nominal pesos 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 ------------- 2010(1) 2010(2) 2009(2) ------ ------ ------ Net sales $499 Ps 6,297 Ps 5,614 Cost of sales 381 4,807 4,938 Gross profit (loss) 118 1,491 676 Selling, general and administrative expenses 54 678 641 Operating income (loss) 64 812 35 Other income (expense) net (4) (50) (70) Comprehensive financing (cost) income 3 42 (28) Interest income 4 50 33 Interest expense and financing expenses (1) (18) (23) Foreign exchange gain (loss), net 1 11 (18) Other financial income (expense) net (0) (0) (20) Income before income tax, asset tax 64 805 (63) Total income taxes 13 169 (12) Income tax, asset tax 5 67 21 Deferred income taxes 8 102 (33) Net income $50 Ps 635 Ps (51) Minority net income 0 0 2 Majority net income 50 635 (53) weighted average shares outstanding (in thousands) 600,000 600,000 599,954 Net majority Income per share (in U.S.D per ADS) 1.01 1.06 (0.09) --------------------------------- ---- ---- ----- JANUARY - SEPTEMBER ------------------- U.S.D. Mexican Pesos ------------- 2010(1) 2010(2) 2009(2) ------ ------ ------ Net sales US 1,459 Ps 18,433 Ps 17,472 Cost of sales 1,146 14,469 14,238 Gross profit (loss) 314 3,964 3,233 Selling, general and administrative expenses 160 2,027 1,844 Operating income (loss) 153 1,937 1,389 Other income (expense) net (6) (80) (106) Comprehensive financing (cost) income 6 75 (134) Interest income 10 123 107 Interest expense and financing expenses (5) (57) (67) Foreign exchange gain (loss), net 1 15 (37) Other financial income (expense) net (0) (6) (137) Income before income tax, asset tax 153 1,932 1,149 Total income taxes 32 403 224 Income tax, asset tax 25 315 72 Deferred income taxes 7 88 152 Net income 121 1,529 925 Minority net income 0 1 9 Majority net income 121 1,528 917 weighted average shares outstanding (in thousands) 600,000 600,000 599,930 Net majority Income per share (in U.S.D per ADS) 2.42 2.55 1.53 ----------------------------- ---- ---- ---- (1) For reference, in millions of U.S. dollars using an exchange rate of $12.63 Source: Mexico's National Bank, as of September 30, 2010. (2) Millions of Mexican nominal pesos C.- Consolidated Statement Cash Flow Industrias Bachoco, S.A.B. de C.V. Consolidated Statement of Cash Flows Mexican Pesos ------------- U.S.D. 2010(2) 2009(2) As of As of September 2010(1) September 30, 30, ------ -------------- ---------- NET MAJORITY INCOME BEFORE INCOME TAX $153 Ps. 1,932 Ps. 1,149 ITEMS THAT DO NOT REQUIRE CASH: 15 188 237 Other Items 15 188 237 ITEMS RELATING TO INVESTING ACTIVITIES: 39 494 455 Depreciation and others 41 512 486 Income (loss) on sale of plant and equipment (1) (17) (22) Other Items (0) (1) (9) ITEMS RELATING TO FINANCING ACTIVITIES: 14 180 151 Interest income (expense) 5 57 44 Other Items 10 123 107 NET CASH GENERATED FROM NET INCOME BEFORE TAXES $221 Ps. 2,794 Ps. 1,992 CASH GENERATED OR USED IN THE OPERATION (23) (284) (589) Decrease(increase) in accounts receivable 8 100 163 Decrease (increase) In inventories 10 125 705 Increase (decrease) in accounts payable (38) (477) (727) Income taxes paid (3) (33) (729) NET CASH FLOW FROM FINANCING ACTIVITIES $199 Ps. 2,510 Ps. 1,403 INVESTING ACTIVITIES NET CASH FLOW FROM INVESTING ACTIVITIES (32) (407) (821) Acquisition of property, plant and equipment (18) (234) (706) Proceeds from sales of property plant and equipment (1) (13) (17) Other Items (13) (161) (98) CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES $166 Ps. 2,103 Ps. 581 FINANCING ACTIVITIES Net cash provided by financing activities: (36) (450) 180 Proceeds from loans 87 1,099 1,800 Principal payments on loans (103) (1,299) (1,377) Dividends paid (20) (250) (250) Other items 0 0 7 NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 101 1,276 288 CASH AND INVESTMENTS AT THE BEGINNING OF YEAR 198 2,503 1,972 CASH AND INVESTMENTS AT END OF PERIOD $299 Ps. 3,778 Ps. 2,260 (1) For reference, in millions of U.S. dollars using an exchange rate of $12.63 Source: Mexico's National Bank, as of September 30, 2010. (2) Millions of Mexican nominal pesos D.- Derivatives Position Report Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of September 30, 2010 Quarter: 3 ANEXO 1 Objective of Type of Financial the Value of the Instrument Instrument Notional Related Commodity 3Q-2010 2Q-2010 ------- ------- Forwards, knock out forwards, puts, collars and others under different amounts Hedge and and conditions negotiation $114,302 $12.63 $12.89 Futures for corn Corn for Corn for Sept and Soybean meal Hedge $70,771 December 2010: 2010: $3.6275 $4.9575 USD/ USD/bushel. bushel. Soybean Soybean meal; meal;$259.40 $306.90 USD/ for December ton for 2010 December 2010 --------------- Options for corn Hedge and negotiation -$386 Type of Financial Amounts Due Guaranties Instrument Reasonable Value by Year Required 3Q-2010 2Q-2010 ------- ------- Forwards, knock out forwards, The deals puts, consider the collars and possibility others under 88.0% in of margin different 2010 and calls but not amounts and 12.0% in another kind conditions $4,491 $2,450 2011 of guarantee Futures for corn and Soybean meal $14,296 $3,634 2010 Options for corn -$386 None of the financial instruments exceed 5% of total assets as of September 30, 2010. A negative value means an unfavorable effect for the Company. The notional value represents the net position as of September 30, 2010 at the exchange rate of Ps.12.63 per USD. Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of September 30, 2010 Quarter: 3 Table 2 Reasonable Value as Type of Financial of Sept Instrument 30, 2010 Value of the Related Commodity-reference value ------------------------- -2.5% 2.5% 5.0% ---- --- --- Forwards, knock out forwards, puts, collars and others under different amounts and conditions* $4,491 $12.31 $12.95 $13.26 -5% 5% 10% --- --- --- Futures for corn and, $4.7096 $5.2054 $5.4533 Soybean $14,296 $291.56 $322.25 $337.59 Options for corn** -$386 Type of Financial Effect on the Instrument Income Statement Effect on the Cash Flow *** --------------------------- -2.5% 2.5% 5.0% ---- --- --- Forwards, knock out forwards, puts, collars and others under different amounts and conditions* Direct $1,633 $8,535 $1,770 -5% 5% 10% --- --- --- Futures for corn and, The effect will materialize as the inventory is Soybean consumed $10,042 $18,549 $22,802 Options for corn** -$ 1,075 $303 $991 A negative value means an unfavorable effect for the Company. ** The reference value is the Futures of corn for December, $4.9575 USD for bushel and of soybean meal for December 2010, $306.9 USD/ ton. *** The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. *** 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
Industrias Bachoco, S.A.B. de C.V.
CONTACT: IR Contacts: Daniel Salazar, CFO, Claudia Cabrera, IRO,
+52-461-618 3555, inversionistas@bachoco.net; or In New York: Grayling, Lucia
Domville, +1-646-284-9416, Lucia.Domville@us.grayling.com
Web Site: http://www.bachoco.com.mx/
