Industrias Bachoco Announces Fourth Quarter 2007 and Full Year Results

    CELAYA, Mexico, Jan. 31 /PRNewswire/ -- Industrias Bachoco S.A.B. de
 C.V. ("Bachoco" or "the Company") (NYSE:   IBA; BMV: Bachoco B), Mexico's
 leading producer and processor of poultry products, today announced its
 unaudited results for the quarter ended December 31, 2007. All figures have
 been prepared in accordance with Mexican GAAP and are stated in constant
 Mexican pesos as of December 31, 2007.
 
 
Highlights: - Bachoco recorded sales of Ps. 18,208.8 during 2007, 17.2% above the Ps. 15,537.5 million reached in 2006. Fourth quarter sales increased 11.0% as compared with the same quarter of 2006. - Bachoco achieved EPS of Ps. 2.13 (US$2.34 per ADS) for 2007, compared to EPS of Ps. 1.54 (US$1.70 per ADS) for 2006. Fourth quarter EPS were Ps. 0.30 (US$ 0.33 per ADS) versus Ps. 0.19 (US$ 0.21 per ADS). - In 2007, the company increased its facilities by adding two new complexes as a result of the agreements reached with three different companies. CEO's Comments: Cristobal Mondragon, Bachoco's CEO, stated, "Fourth quarter results were again affected, as it occurred during the whole year, by the increase in our costs due to the rising pressure of raw materials worldwide. Nonetheless, we sold the highest volume of chicken, our main product line, in a single quarter historically. Total sales increased 11.0% during the quarter, we sold our entire production volume for our main business lines and had an important improvement in the table eggs business. "Overall, 2007 was a challenging year. Despite the increase in raw materials, we managed to improve our operational results, recording an increase of 5.3% from last year. "The Company successfully achieved these results under a difficult scenario, mainly because of its efficiency, productivity and service improvement efforts, which allowed us to obtain positive results. "At the end of the year, the Company announced a business arrangement with "AGRA", a table egg company located in northern Mexico, which will contribute to reinforcing our presence in that region with branded table eggs," concluded Mr. Mondragon.
FOURTH QUARTER 2007 RESULTS Net Sales
Net sales for the quarter reached Ps. 4,602.6 million, 11.0% above the Ps. 4,145.5 million reported in 4Q06. This increase was mainly driven by the 7.7% increase in chicken sales, 25.9% in table eggs sales, and 17.0% in swine sales, which, in turn, were partially offset by a 2.1% decrease in balanced feed sales. Net Sales by Product Line 4Q07 (%) 4Q06 (%) CHICKEN 75.7 78.0 EGGS 10.6 9.4 BALANCED FEED 7.7 8.8 SWINE AND OTHER LINES 6.0 3.8 TOTAL COMPANY 100.0 100.0 Operating Results Bachoco's fourth quarter gross margin of 17.0% was lower than the 26.2% in 4Q06. The decrease is mainly attributed to the increase in raw materials costs. The Company's operating margin dropped to 4.4%, from the 13.1% margin in the same 2006 quarter. EBITDA during the quarter totaled Ps. 347.6 million.
Taxes Taxes recognized by the Company during the quarter were Ps. 70.8 million. Net Income Net income for 4Q07 was Ps. 180.3 million, or Ps. 0.30 per share (US$0.33 per ADS), compared to net income of Ps. 113.3 million, or Ps.0.19 per share (US$0.21 per ADS) reported in the same 2006 period. During the fourth quarter of 2006, the Company recognized a special charge of Ps. 335.8 million, which did not affect cash flow. RESULTS BY BUSINESS SEGMENT Chicken Chicken sales rose 7.7% during 4Q07 as a result of a 10.4% increase in volume, which was partially offset by 2.5% decrease in prices. During this quarter, the demand for chicken was strong and prices for chicken were lower than expected. The volume increase was driven by added capacity and productivity improvements. Table Eggs Sales of table eggs grew stronger by 25.9%, while volumes increased 4.1% and the price jumped 20.9% from the same last year's quarter. Balanced Feed Balanced feed sales and volume decreased during this quarter by 2.1% and 12.1%, respectively, when compared to 4Q06. Pricing, however, rose 11.3% driven by worldwide pressure on grains and other raw materials. Swine and Other Lines Sales of swine and other lines increased 90.4% in the quarter. This increase was mainly the result of turkey sales and a 22.3% increase in swine volume.
FULL YEAR 2007 Net Sales
Net sales for 2007 were 17.2% higher at Ps. 18,208.8 million, when compared to Ps. 15,537.5 million reported in 2006. Sales rose mainly as chicken sales grew 17.2%, table eggs increased 22.2%, balanced feed rose 4.2% and swine increased 24.3%. Net Sales by Product Line 2007 (%) 2006 (%) CHICKEN 77.6 77.6 EGGS 9.6 9.2 BALANCED FEED 8.0 9.0 SWINE AND OTHER LINES 4.8 4.2 TOTAL COMPANY 100.0 100.0 Operating Results Bachoco's gross margin reached 20.5% during the year, below the 22.4% gross margin reported in 2006. The 17.2% increase in sales was partially offset by a 20.1% increase in the cost of sales. Bachoco's operating margin was 8.2% lower than the 9.1% of the same 2006 period. EBITDA during the year reached Ps. 2,059.2 million, a 5.5% increase over 2006. Taxes The taxes recognized by the Company during the year were Ps. 386.9 million. Net Income Net income for the year ended December 31, 2007, was Ps. 1,278.3 million. Earnings per share reached Ps. 2.13, (U.S. $2.34 per ADS), compared to Ps. 1.54 (U.S. $1.70 per ADS) reported in 2006. Balance Sheet The Company maintained a healthy financial structure. Liquidity remained solid with cash and cash equivalents at Ps. 3,040.0 million as of December 31, 2007. Debt was Ps. 109.6 million as of December 31, 2007. Capex during the year was Ps. 861.7 million. Company Description Industrias Bachoco S.A.B. de C.V. (also referred to in this report as Bachoco or the Company) was founded by the Robinson Bours family in 1952. 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, swine and turkey, and the Company is also an important player in the balanced feed industry in Mexico. The Company's headquarters are based in Celaya, Guanajuato, located in Mexico's central region. Industrias Bachoco made an initial public stock offering in September 1997. Its securities are listed and traded on the BMV (Bachoco B) and on the NYSE (IBA). 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. AND SUBSIDIARIES Condensed Consolidated Statements of Income (millions of constant pesos as of December 31, 2007, and millions of U.S. dollars, except per share data) Fourth Quarter Full Year Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 2007(1) 2007 2006 2007(1) 2007 2006 Net Sales US 422 Ps 4,603 Ps 4,145 US 1,668 Ps 18,209 Ps 15,537 Cost of Sales 350 3,821 3,058 1,326 14,478 12,053 Gross Profit 72 782 1,087 342 3,731 3,485 Selling, general and administrative expenses 53 581 542 205 2,243 2,072 Operating Income 18 201 545 136 1,488 1,412 Comprehensive Financing Cost (income) Interest Expense (Income) (2) (22) (59) (16) (177) (183) Foreign Exchange Loss (gain) 0 2 10 0 3 (41) Gain from Monetary Position 3 30 31 7 76 79 Total Comprehensive Financing Cost (income) 1 10 (18) (9) (98) (145) Other Income Net 5 60 (6) 7 80 13 Income before Provisions for Income Tax, Employee Profit Sharing and Minority Interest 23 250 557 153 1,666 1,570 Provisions for: Income Tax, Asset Tax (1) (7) (75) (12) (132) (242) Deferred Income Taxes (6) (64) (370) (23) (255) (402) Income before Minority Interest 16 180 113 117 1,280 926 Minority Interest 0 1 1 (0) (1) (1) Net Income 17 180 113 117 1,278 925 Weighted Average Shares Outstanding (Thousand) 600,000 600,000 600,000 600,000 600,000 599,571 Net Income per Share 0.33 0.30 0.19 2.34 2.13 1.54 Dividend per Share -- -- -- 0.05 0.60 0.62 (1) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 10.9170 per U.S. dollar, the noon buying rate at December 31, 2007. INDUSTRIAS BACHOCO, S.A.B. DE C.V. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (millions of constant pesos as of December 31, 2007, and millions of U.S. dollars) Dec 31 Dec 31 Dec 31 2007(1) 2007 2006 ASSETS Current Assets: Cash and Cash Equivalents US 278 Ps 3,040 Ps 3,588 Accounts Receivable less Allowance for Doubtful Accounts 66 725 541 Inventories 387 4,220 2,835 Other Current Assets 49 534 390 Total Current Assets 780 8,520 7,354 Net Property, Plant and Equipment 929 10,140 9,888 Other Non Current Assets 32 354 340 Total Non Current Assets 961 10,494 10,228 TOTAL ASSETS 1,742 19,015 17,582 LIABILITIES Current Liabilities: Notes Payable to Banks 5 59 10 Trade Accounts Payable 104 1,138 851 Other Accrued Liabilities 29 320 300 Total Current Liabilities 139 1,517 1,161 Long-Term Debt 5 51 36 Labor Obligations 5 53 79 Deferred Income Taxes and Others 214 2,333 2,185 Total Long-Term Liabilities 223 2,437 2,300 TOTAL LIABILITIES 362 3,954 3,461 STOCKHOLDERS' EQUITY Capital stock 212 2,314 2,298 Premium in Public Offering of Shares 60 660 745 Retained Earnings 1,435 15,665 18,901 Net Income for the Year 117 1,278 907 Deficit from Restatement of Stockholders' Equity (342) (3,732) (3,759) Reserve for Repurchase of Shares 22 244 160 Minimum Seniority Premium Liability Adjustment -- -- (1) Effect of Deferred Income Taxes (130) (1,415) (5,176) Total Majority Stockholders' Equity 1,375 15,014 14,076 Minority Interest 4 47 45 TOTAL STOCKHOLDERS' EQUITY 1,380 15,061 14,121 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,742 19,015 17,582 (1) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 10.9170 per U.S. dollar, the noon buying rate at December 31, 2007. INDUSTRIAS BACHOCO, S.A.B. DE C.V. AND SUBSIDIARIES Condensed Consolidated Statements of Changes in Financial Position (millions of constant pesos as of December 31, 2007, and millions of U.S. dollars) Dec 31 Dec 31 Dec 31 2007(1) 2007 2006 Operating Activities: Net Income US$ 117 Ps. 1,280 Ps. 926 Adjustments to Reconcile Net Income to Resources Provided by Operating Activities: Depreciation and Others 52 570 539 Changes in Operating Assets and Liabilities (126) (1,371) (202) Deferred Income Taxes 14 151 369 Resources Provided by Operating Activities 58 630 1,633 Financing Activities: Increase of Capital Stock 0 0 0 Proceeds from Long-term Debt -- -- -- Proceeds from Short-term Debt 12 135 44 Repayment of Long-term Debt and Notes Payable (5) (59) (149) Decrease in Long-term Debt in Constant Pesos (1) (12) (6) Cash Dividends Paid (33) (362) (378) Resources Provided by (Used in) Financing Activities (27) (298) (489) Investing Activities: Acquisition of Property, Plant and Equipment (79) (862) (961) Minority Interest 0 1 (1) Others (1) (16) (17) Resources Used in Investing Activities (80) (876) (979) Net (Decrease) Increase in Cash and Cash Equivalents (50) (544) 165 Cash and Cash Equivalents at Beginning of Period 328 3,584 3,420 Cash and Cash Equivalents at End of Period US$ 278 Ps. 3,040 Ps. 3,585 (1) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 10.9170 per U.S. dollar, the noon buying rate at December 31, 2007. IR Contacts: Daniel Salazar, CFO Claudia Cabrera, IRO Ph 011 52 (461) 618 35 55 inversionistas@bachoco.net In New York: Lucia Domville The Global Consulting Group Ph. (646) 284 9416 ldomville@hfgcg.com http://www.bachoco.com.mx

SOURCE Industrias Bachoco S.A.B. de C.V.

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