CELAYA, Mexico, Feb. 3, 2011 /PRNewswire/ -- 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 fourth quarter and 2010 full year ended December 31, 2010. All figures have been prepared in accordance with Mexican GAAP. Following Mexican Accounting Principles, all data is presented in nominal Mexican pesos.
Highlights: -- Total sales for the fourth quarter rose 9.9% and 6.6% for year 2010 -- Chicken volume sold rose 7.2% during 2010 compared with the previous year -- EBITDA margin was 12.9% for year 2010, compared to an EBITDA margin of 8.9% reached in the previous year -- Earnings per share in 2010 reached Ps. 3.34 (USD$ 3.24 per ADS), compared to Ps. 1.35 (USD$1.30 per ADS) in 2009. Net income per share in 4Q10 of Ps. 0.80 (USD$0.77 per ADS) compared to Ps. 0.18 loss per share (USD$ 0.18 loss per ADS) in 4Q09. CEO's Comments:
Rodolfo Ramos, Bachoco's CEO, stated, "The fourth quarter is typically a good quarter for the Company, and this year was not the exception; we recorded solid results. Our chicken business line performance was strong during the quarter; we observed a good demand and prices were sound.
"Our egg business line continued to be affected by the oversupply conditions; nevertheless, prices and volume showed some recovery when compared with previous quarters.
"The rest of our business lines, swine, turkey, balance feed and others, continued to be profitable for the Company and in line with our strategies.
"Our financial position is healthy, with a strong cash position and a low indebtedness level.
"With this fourth quarter results, we recorded a successful year for the company in 2010. We achieved our goals and set a solid basis to face a 2011 challenging; we trust our team, which along the continuous improvement of our processes and an adequate administration of our raw materials inventories, will lead us to achieve new goals."
FOURTH QUARTER 2010 RESULTS Net sales 4Q09 (%) 4Q10 (%) -------- Chicken 77.2 80.7 ---- Eggs 10.4 8.0 --- Balanced feed 6.1 5.5 --- Swine 1.1 1.2 --- Other lines 5.2 4.6 ----------- --- --- Total Sales 100.0% 100.0% ----------- ----- ----- Net Sales
Net sales during the fourth quarter amounted to Ps. 6,374.6 million, 9.9% above the Ps. 5,800.3 million reported in the same 2009 quarter. The good market conditions seen in the previous quarter continued, and as a result, the increase in sales 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 4Q10 gross profit was Ps. 1,287.7 million, with a margin of 20.2%, which compares favorably with the Ps. 707.7 million profit and 12.2% margin reported in 4Q09. This result is directly attributed to higher sales in our chicken and swine business.
The Company registered an operating profit of Ps. 584.5 million, which is also greater than the operating profit of Ps. 38.0 million registered in the same 2009 quarter. The operating margin for the quarter was 9.2% compared to an operating margin of 0.7% in 4Q09.
EBITDA amounted to Ps. 758.2 million (11.9% margin), above the Ps. 205.2 million (3.5% margin) reported in the same 2009 period.
Net Majority Income
Net majority income for the 4Q10 amounted to PS. 477.1 million, or Ps. 0.80 per share (US$0.77 per ADS), compared to a net majority loss of Ps. 109.5 million, or Ps. 0.18 loss per share (US$0.18 loss per ADS) reported in the same 2009 period.
QUARTERLY RESULTS BY BUSINESS SEGMENT Chicken
Sales of chicken products increased 14.9%, when compared to 4Q09, as a result of a 17.8% increase in chicken prices, which were partially offset by a decrease of 2.5% in volume sold. The good balance between supply and demand in the 3Q10 extended to the last quarter of 2010.
Table Eggs
Sales of table eggs products decreased by 15.2% during the 4Q10, as egg prices decreased 10.6% and volume fell by 5.1%. These figures are a result of lower demand for eggs as well as the oversupply registered in the industry during most part of the year.
Balanced Feed
Sales of balanced feed showed a slight improvement from previous quarters, sales declined 0.9% as a result of a 2.6% decrease in balanced feed prices, which were partially offset by an increase of 1.7% in volume sold. This business line has been affected by the volatility of raw material prices.
Swine
The swine business line recorded again a strong quarter. Sales were sound and rose 21.8%, as swine prices increased 20.7% and volume sold rose 0.9% increase in the period.
Other Lines
Sales of other lines decreased 3.8% when compared with the same quarter of 2009, as sales of by-products declined.
YEAR 2010 RESULTS Net Sales
Net sales for the year amounted to Ps. 24,807.2 million, up 6.6% from the Ps. 23,271.8 million reported in the previous year. The increase was mainly driven by the 10.7% increase in chicken sales and 26.8% in swine sales, both of which were partially offset by the 10.8% decrease in table eggs sales and 5.8% decrease in balanced feed sales.
Net sales 2009(%) 2010(%) ------- Chicken 78.3 81.3 ---- Eggs 10.1 8.5 ---- Balanced feed 6.3 5.6 --- Swine 1.0 1.2 --- Other lines 4.3 3.4 ----------- --- --- Total Sales 100.0% 100.0% ----------- ----- ----- Operating Results
Bachoco's 2010 gross profit was Ps. 5,251.4 million, with a margin of 21.2%, which compares favorably with the Ps. 3,940.8 million profit and 16.9% margin reported in 2009, and was mainly attributed to stronger results in our chicken, balance feed and swine business lines.
The Company's operating profit was Ps. 2,521.6 million, compared to an operating profit of Ps. 1,426.7 million reached in year 2009.
EBITDA amounting Ps. 3,207.7 million (12.9% margin), higher than the Ps. 2,079.5 million (8.9% margin) recorded in 2009.
Taxes Total taxes for the year were Ps. 504.3 million. Net Majority Income
Net majority income for the year was Ps. 2,004.9 million, or Ps. 3.34 per share (US$3.24 per ADS), compared to net income of Ps. 807.0 million, or Ps. 1.35 per share (US$1.30 per ADS) reported in year 2009.
Balance Sheet
Total cash and cash equivalents amounted to Ps. 4,177.2 million as of December 31, 2010. The total debt outstanding for the same period was Ps. 646.9 million.
Capital Expenditures
The CAPEX of 2010 amounted to Ps. 322.0 million, and was entirely financed with internally generated resources.
Exhibits: A.- Consolidated Balance 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 December December 31, 31, --------- --------- ASSETS Cash and cash equivalents $338 Ps 4,177 Ps 2,503 Total accounts receivable 132 1,638 1,498 Inventories 367 4,534 4,519 Other current assets Total current assets 837 10,350 8,519 Net property, plant and equipment 856 10,587 10,910 Other non current assets 33 409 409 TOTAL ASSETS $1,726 Ps 21,346 Ps 19,838 ------ --- ---- LIABILITIES Notes payable to banks 11 140 592 Accounts payable 132 1,633 1,723 Other taxes payable and other accruals 38 468 361 Total current liabilities 181 2,241 2,675 Long-term debt 41 507 372 Labor obligations 8 104 104 Deferred income taxes and others 170 2,103 2,040 Total long-term liabilities 219 2,715 2,515 TOTAL LIABILITIES $401 Ps 4,956 Ps 5,191 - STOCKHOLDERS' EQUITY Capital stock 186 2,295 2,295 Paid-in capital 60 745 745 Reserve for repurchase of shares 12 154 159 Retained earnings 900 11,139 10,591 Net majority income of the year 162 2,005 807 Deficit from restatement of stockholder's equity - - - Derivate financial instruments - - - Total majority stockholder's equity 1,321 16,338 14,598 Minority interest 4 52 50 TOTAL STOCKHOLDERS' EQUITY 1,325 16,390 14,648 ----- ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,726 Ps 21,346 Ps 19,838 --------------------- ------ --- ------ --- ------ (1) For reference, in millions of U.S. dollars using an exchange rate of $12.37 Source: Mexico's National Bank, as of December 31, 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- FOURTH QUARTER -------------- U.S.D. Mexican Pesos ------------- 2010(1) 2010(2) 2009(2) ------ ------ ------ Net sales $515 Ps 6,375 Ps 5,800 Cost of sales 411 5,087 5,093 Gross profit (loss) 104 1,288 708 Selling, general and administrative expenses 57 703 670 Operating income (loss) 47 585 38 Other income (expense) net (4) (51) 43 Comprehensive financing (cost) income 4 47 (0) Interest income 4 55 24 Interest expense and financing expenses (1) (13) (25) Foreign exchange gain (loss), net (0) (4) (2) Other financial income (expense) net 1 9 3 Income before income tax, asset tax 47 580 81 Total income taxes 8 102 188 Income tax, asset tax 14 178 31 Deferred income taxes (6) (76) 157 Net income $39 Ps 479 Ps (107) Minority net income 0 2 2 Majority net income 39 477 (109) weighted average shares outstanding (in thousands) 599,931 599,931 599,995 Net majority Income per share (in U.S.D per ADS) 0.77 0.80 (0.18) --------------------------------- ---- ---- ----- YEAR 2010 --------- U.S.D. Mexican Pesos ------------- 2010(1) 2010(2) 2009(2) ------ ------ ------ Net sales US 2,005 Ps 24,807 Ps 23,272 Cost of sales 1,581 19,556 19,331 Gross profit (loss) 425 5,251 3,941 Selling, general and administrative expenses 221 2,730 2,514 Operating income (loss) 204 2,522 1,427 Other income (expense) net (11) (132) (63) Comprehensive financing (cost) income 10 122 (134) Interest income 14 178 131 Interest expense and financing expenses (6) (70) (96) Foreign exchange gain (loss), net 1 11 (39) Other financial income (expense) net 0 3 (130) Income before income tax, asset tax 203 2,512 1,230 Total income taxes 41 504 412 Income tax, asset tax 40 493 103 Deferred income taxes 1 11 309 Net income 162 2,008 818 Minority net income 0 3 11 Majority net income 162 2,005 807 weighted average shares outstanding (in thousands) 599,983 599,983 599,946 Net majority Income per share (in U.S.D per ADS) 3.24 3.34 1.35 --------------------------------- ---- ---- ---- (1) For reference, in millions of U.S. dollars using an exchange rate of $12.37 Source: Mexico's National Bank, as of December 31, 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) 2010(1) As of As of ------ December 31, December 31, ------------ ------------ NET MAJORITY INCOME BEFORE INCOME TAX $203 Ps. 2,512 Ps. 1,230 ITEMS THAT DO NOT REQUIRE CASH: (33) (407) (407) ITEMS RELATING TO INVESTING ACTIVITIES: 55 684 626 Depreciation and others 55 686 653 Income (loss) on sale of plant and equipment 0 1 (16) Other Items (0) (3) (11) ITEMS RELATING TO FINANCING ACTIVITIES: 20 248 227 Interest income (expense) 6 70 96 Other Items 14 178 131 NET CASH GENERATED FROM NET INCOME BEFORE TAXES $246 Ps. 3,037 Ps. 1,675 CASH GENERATED OR USED IN THE OPERATION: (28) (340) (430) Decrease (increase) in accounts receivable (5) (57) (2) Decrease (increase) in inventories (2) (21) 599 Decrease (increase) in accounts payable (7) (88) (260) Decrease (increase) in other liabilities (14) (173) (768) NET CASH FLOW FROM FINANCING ACTIVITIES $218 Ps. 2,697 Ps. 1,245 INVESTING ACTIVITIES NET CASH FLOW FROM INVESTING ACTIVITIES (37) (452) (812) Acquisition of property, plant and equipment (26) (322) (836) Proceeds from sales of property plant and equipment (3) (42) (21) Other Items (7) (88) 45 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES $181 Ps. 2,245 Ps. 433 FINANCING ACTIVITIES Net cash provided by financing activities: (46) (570) 98 Proceeds from loans 91 1,126 2,016 Principal payments on loans (117) (1,443) (1,678) Dividends paid (20) (250) (250) Other items (0) (3) 10 NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 135 1,675 530 CASH AND INVESTMENTS AT THE BEGINNING OF YEAR 202 2,503 1,972 CASH AND INVESTMENTS AT END OF PERIOD $338 Ps. 4,177 Ps. 2,503 (1) For reference, in millions of U.S. dollars using an exchange rate of $12.37 Source: Mexico's National Bank, as of December 31, 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 December 31, 2010 Quarter: 4 TABLE 1 Objective Type of Financial of the Instrument Instrument Notional Forwards, knock out forwards, puts, collars and others under different amounts and Hedge and conditions negotiation $37,172 Futures for corn and soybean meal Hedge $78,473 -------------------- ----- ------- Hedge and Options for corn negotiation $28,011 Type of Financial Instrument Value of the Related Commodity 4Q-2010 3Q-2010 ------- ------- Forwards, knock out forwards, puts, collars and others under different amounts and conditions $12.37 $12.63 Corn for March, May and July 2011 respectively: $6.2900, $6.3650 and $6.4000 USD/bushel. Soybean meal respectively: $6.2900, $6.3650 and $6.4000 USD/ Corn for December bushel. Soybean meal for 2010: $4.9575 USD/ March, May and July 2011 bushel. Soybean respectively: $373.90, meal for December Futures for corn and $374.50 and $374.80 USD/ 2010: $306.90 USD/ soybean meal ton. ton. -------------------- ------------------------ ------------------ Options for corn Type of Financial Reasonable Instrument Value 4Q- 2010 3Q-2010 ---- ------- Forwards, knock out forwards, puts, collars and others under different amounts and conditions $33 $4,491 Futures for corn and soybean meal $5,341 $14,296 -------------------- ------ ------- Options for corn $1,811 -$ 386 Type of Financial Amounts Due Guaranties Instrument by Year Required Forwards, knock out forwards, puts, collars and others under different amounts and conditions 2011 Futures for corn and The deals soybean meal 2011 consider the possibility -------------------- of margin calls but not another kind of guarantee Options for corn None of the financial instruments exceed 5% of total assets as of December 31, 2010. A negative value means an unfavorable effect for the Company. The notional value represents the net position as of December 31, 2010 at the exchange rate of Ps.12.37 per USD. Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of December 31, 2010 Quarter: 4 Table 2 Reasonable Value as of Type of Financial December 31, Value of the Related Commodity- Instrument 2010 reference value ------------------------------- -2.5% 2.5% 5.0% ---- --- --- Forwards, knock out forwards, puts, collars and others under different amounts and conditions* $33 $12.06 $12.68 $12.99 ------------------------ --- ------ ------ ------ -5% 5% 10% --- --- --- Futures for corn and, $5.9755 $6.6045 $6.9190 Soybean** $5,341 $355.21 $392.60 $411.29 --------- ------ ------- ------- ------- Options for corn $1,811 Type of Financial Effect on the Effect on the Cash Flow Instrument Income Statement *** ----------------------- -2.5% 2.5% 5.0% ---- --- --- Forwards, knock out forwards, puts, collars and others under different amounts and conditions* Direct -$ 897 $1,191 $2,458 ---------------- ------ ------------ ------ ------ -5% 5% 10% --- --- --- Futures for corn and, The effect will materialize as the inventory is Soybean** consumed $1,418 $9,265 $13,189 --------- ------------------ ------ ------ ------- Options for corn $597 $1,520 $2,259 A negative value means an unfavorable effect for the Company. * The reference value is the exchange rate of Ps. $12.37 per USD as of December 31, 2010 ** The reference value is: corn futures for March, May and July 2011: $6.2900, $6.3650 and $6.4000 usd/bushel. and soybean meal futures for March, May and July 2011: $373.90, $374.5 and $374.8 USD/ton. Note: even when table set above shows corn and soybean prices for contracts of March 2011, the effect on the cash flow corresponds to the total positions effects. *** 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
Industrias Bachoco, S.A.B. de C.V.
CONTACT: IR Contacts: Daniel Salazar, CFO, Claudia Cabrera, IRO,
+011-52-461-618-3555, inversionistas@bachoco.net
Web Site: http://www.bachoco.com.mx/
