Industrias Bachoco Announces its 2010 First Quarter Results
CELAYA, Mexico, April 26 /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 first quarter ended March 31, 2010. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, data is presented in nominal Mexican pesos.
-- Total sales increased 1.1% from 2009's first quarter
-- The Company recorded historic chicken volume sold, increasing 16.6% over 1Q09. Volume sold also increased for table eggs and swine
-- EBITDA margin of 8.6% in 1Q10 was lower than the 11.2% in 2009's first quarter
-- Earnings per share for the quarter reached Ps.$ 0.458, compared to PS$ 0.457 in 1Q09
Cristobal Mondragon, Bachoco's CEO, stated, "While the economic conditions prevailing in Mexico continued to slowly improve, we observed a good demand for our products, impacting our first quarter results and showing an improvement from the previous year in terms of sales and volume sold.
"In particular, the chicken industry was stable with good demand, lower prices and costs than in the previous quarter. The cost was lower mainly due to the strength of the Mexican peso and stable cost for our main imports.
"As a result of the business agreement reached last July, production efficiency and some organic growth registered in the states of Chiapas and Yucatan, the Company recorded an important increase in volume of chicken sold during this quarter.
"Our egg business, swine and balanced feed showed important improvements as seen in the results for the quarter.
"Our results were strong and sound, while our financial position remained solid even after the investments made during the past quarters," concluded Mr. Mondragon.
Releases made during the quarter:
On April 7, 2010, the Company reported to the market that its table eggs facilities located in Mexicali, Baja California, which represent about 9% of its total table eggs production, were affected by the earthquake registered on April 4, 2010.
FIRST QUARTER 2010 RESULTS Net sales 1Q10 (%) 1Q09 (%) Chicken 79.8% 79.0% Eggs 10.1% 10.2% Balanced feed 5.5% 5.8% Swine 1.2% 1.0% Other lines 3.4% 4.0% Total Sales 100.00% 100.00%
Net sales for the first quarter amounted to Ps. 5,931.2 million, and were 1.1% above the Ps. 5,866.8 million reported in the same 2009 quarter. This increase was mainly driven by higher chicken, eggs and swine sales.
Bachoco's first quarter gross margin was 17.2%, lower than 18.8% reported in 1Q09. This result is directly attributed to a decrease in the sale prices of Bachoco's main line products.
The Company registered an operating profit of Ps. 342.0 million, which is lower than the operating profit of Ps. 494.8 million registered in the same 2009 quarter. The operating margin for the first quarter of 2010 was 5.8%.
EBITDA amounted to Ps. 511.9 million, below the Ps. 654.3 million reported in the same 2009 quarter.
Taxes Total taxes for the first quarter were Ps. 62.5 million.
Comprehensive Financial Income (Cost)
The Company's comprehensive financial cost was Ps. 2.9 million during the quarter, which was substantially below the comprehensive financial cost of Ps. 119.8 million reported in the same year-ago quarter.
Net Majority Income (loss)
Net majority income for the first quarter amounted to PS. 274.9 million, or Ps. 0.46 per share (US$0.44 per ADS), compared to a net majority income of Ps. 273.9 million, or Ps. 0.46 per share (US$0.44 per ADS) reported in the same 2009 period.
The financial position of the Company remained solid with cash and cash equivalents amounting to Ps. 2,851.9 million as of March 31, 2010. The total debt outstanding for the same period was of Ps. 863.4 million.
Capital Expenditures CAPEX during the first quarter of 2010 amounted to Ps.60.8 million. RESULTS BY BUSINESS SEGMENT
Sales of chicken products increased 2.1%, when compared to 1Q09, as a result of the 16.6% increase in volume, which is mainly attributed to productivity achievements, organic growth and the integration of the new business agreements. This increase in volume was partially offset by the 12.4% decline in chicken prices.
Sales of table eggs products increased 0.2% during the first quarter, mainly stemming from a 2.4% increase in the volume sold. This growth was partially offset by the 2.0% decrease in table eggs prices. This business line remained solid with a good level between demand and supply.
Sales of balanced feed decreased 3.8%, mainly due to the 0.8% decrease in prices and 3.1% decrease in balance feed volume.
The swine business line was stable during the first quarter. Sales were strong and rose 15.8%, as a result of a 20.1% gain in volume sold; which was partially offset by a 3.6% decrease in swine prices when compared to the same 2009 quarter.
Sales of other lines decreased 13.6% when compared with 1Q09, as sales of turkey and by-products declined.
Exhibits: A.- Consolidated Balanced Sheets B.- Consolidated Statement of Income C.- Consolidated Statement Cash Flow D.- Derivatives Position Report
Industrias Bachoco S.A.B. de C.V. is the largest poultry company in Mexico, with over 800 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 located in Celaya, Guanajuato, Mexico.
For more information, please visit Bachoco's website at http://www.bachoco.com.mx or contact our IR department.
Exhibit A: Consolidated Balance Sheets INDUSTRIAS BACHOCO, S.A.B. DE C.V. Consolidated Statements of Income -unaudited- FIRST QUARTER U.S.D. Mexican Pesos 2010(1) 2010(2) 2009(2) Net sales $480 Ps 5,931 Ps 5,867 Cost of sales 397 4,911 4,765 Gross profit (loss) 83 1,020 1,102 Selling, general and administrative expenses 55 678 607 Operating income (loss) 28 342 495 Other income (expense) net (0) (1) (32) Comprehensive financing (cost) income (0) (3) (120) Interest income 3 34 512 Interest expense and financing expenses (2) (19) (637) Foreign exchange gain (loss), net 0 4 5 Other financial income (expense) net (2) (22) - Income before income tax, asset tax 27 338 343 Total income taxes 5 62 67 Income tax, asset tax 4 46 24 Deferred income taxes 1 17 43 Net income $22 Ps 276 Ps 276 Minority net income 0 1 2 Majority net income 22 275 274 weighted average shares outstanding (in thousands) 600,000 600,000 600,000 Net majority Income per share (in U.S.D. per ADS) 0.44 0.46 0.46 (1) For reference, in millions of U.S. dollars using an exchange rate of $12.357 Source: Mexico's National Bank, as of March 31, 2010. (2) Millions of Mexican nominal pesos Exhibit B: Consolidated Statement of Income 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 March As of March 31, 31, ASSETS Current assets Cash and cash equivalents $231 Ps 2,852 Ps 2,449 Total accounts receivable 121 1,495 1,332 Inventories 346 4,278 3,862 Other current assets - - - Total current assets 698 8,625 7,643 Net property, plant and equipment 875 10,812 10,684 Other non current assets 34 417 516 TOTAL ASSETS $1,607 Ps 19,853 Ps 18,842 LIABILITIES Current liabilities Notes payable to banks 49 611 235 Accounts payable 117 1,441 1,099 Other taxes payable and other accruals 36 446 381 Total current liabilities 202 2,498 1,714 Long-term debt 20 253 382 Labor obligations 8 100 86 Deferred income taxes and others 169 2,088 2,317 Total long-term liabilities 198 2,441 2,785 TOTAL LIABILITIES $400 Ps 4,938 Ps 4,499 STOCKHOLDERS' EQUITY Majority stockholder's equity: Capital stock 186 2,295 2,295 Paid-in capital 60 745 744 Reserve for repurchase of shares 13 159 158 Retained earnings 922 11,389 10,829 Net majority income of the year 22 275 274 Deficit from restatement of stockholder's equity - - - Derivate financial instruments - - - Total majority stockholder's equity 1,203 14,863 14,299 Minority interest 4 51 45 TOTAL STOCKHOLDERS' EQUITY 1,207 14,914 14,344 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,607 Ps 19,853 Ps 18,842 (1) For reference, in millions of U.S. dollars using an exchange rate of $12.357 Source: Mexico's National Bank, as of March 31, 2010. (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 Mexican Pesos U.S.D. 2010(2) 2009(2) 2010(1) As of March 31, As of March 31, NET MAJORITY INCOME BEFORE INCOME TAX $27 Ps. 338 Ps. 343 ITEMS THAT DO NOT REQUIRE CASH: (3) (33) (70) Other Items (3) (33) (70) ITEMS RELATING TO INVESTING ACTIVITIES: 13 162 148 Depreciation and others 14 170 160 Income (loss) on sale of plant and equipment (1) (7) (10) Other Items (0) (1) (2) ITEMS RELATING TO FINANCING ACTIVITIES: 4 53 76 Interest income (expense) 2 19 25 Other Items 3 34 51 NET CASH GENERATED FROM NET INCOME BEFORE TAXES $42 Ps. 521 Ps. 496 CASH GENERATED OR USED IN THE OPERATION 6 77 164 Decrease (increase) in accounts receivable 5 68 183 Decrease (increase) in inventories 19 235 1,256 Increase (decrease) in accounts payable (23) (280) (883) Income taxes paid 4 54 (391) NET CASH FLOW FROM FINANCING ACTIVITIES $48 Ps. 598 Ps. 661 INVESTING ACTIVITIES NET CASH FLOW FROM INVESTING ACTIVITIES (11) (142) (176) Acquisition of property, plant and equipment (5) (61) (140) Proceeds from sales of property plant and equipment (0) (4) (4) Other Items (6) (78) (31) CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES $37 Ps. 456 Ps. 485 FINANCING ACTIVITIES Net cash provided by financing activities: (8) (99) (8) Proceeds from loans 18 226 15 Principal payments on loans (26) (326) (24) Dividends paid - - - Other items 0 1 1 NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 28 349 476 CASH AND INVESTMENTS AT THE BEGINNING OF YEAR 203 2,503 1,972 CASH AND INVESTMENTS AT END OF PERIOD $231 Ps. 2,852 Ps. 2,449 (1) For reference, in millions of U.S. dollars using an exchange rate of $12.357 Source: Mexico's National Bank, as of March 31, 2010. (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 March 31, 2010 Table 1 Type of Financial Objective of the Instrument Instrument Notional Forwards, knock out forwards, puts, collares and others Hedge and under different negotiation $468,454 amounts and conditions Futures for corn and Soybean meal Hedge $48,158 Hedge and Options for corn negotiation $- Type of Financial Value of the Related Commodity Instrument 1Q-2010 4Q-2009 Forwards, knock out forwards, puts, collares and others under different $12.36 $13.08 amounts and conditions Corn for May 2010: Futures for corn and $ 3.45 USD/bushel. Corn of March 2010: Soybean meal Soybean meal; $265.8 $4.145 USD/bushel and $248.6 USD/ton for May and December 2010 respectively Options for corn - Corn of March 2010: - $4.145 USD/bushel Type of Financial Instrument Reasonable Value 1Q-2010 4Q-2009 Forwards, knock out forwards, puts, collares and others under different amounts and conditions -$24,664 $2,004 Futures for corn and Soybean meal -$2,068 -$1,404 Options for corn $- $1,651 Type of Financial Instrument Amounts Due by Year Guaranties Required Forwards, knock out forwards, puts, 99.6% in 2010 and collares and others 0.4% in 2011 under different amounts and The deals consider conditions the possibility of margin calls but not another kind of guarantee Futures for corn and Soybean meal 2010 Options for corn None of the financial instruments exceed 5% of total assets as of March 31, 2010. A negative value means an unfavorable effect for the Company. The notional value represents the net position as of March 31, 2010 at the exchange rate of Ps.12.357 per USD. Industrias Bachoco, S.A.B. de C.V. Thousands of Mexican Pesos, as of March 31, 2010 Table 2 Reasonable Value as of March 31, Type of Financial Instrument 2010 Forwards, knock out forwards, puts, collares and others under different amounts and conditions* -$24,664 Futures for corn and Soybean meal** -$2,068 Options for corn** $- Type of Financial Instrument Value of the Related Commodity - reference value -2.5% 2.5% 5.0% Forwards, knock out forwards, puts, collares and others under different amounts and conditions* $12.05 $12.67 $12.97 -5% 5% 10% Futures for corn and Soybean $3.2775 $3.6225 $3.7950 meal** $252.51 $279.09 $292.38 Options for corn** - - - Type of Financial Instrument Effect on the Income Statement Forwards, knock out forwards, puts, collares and others under Direct different amounts and conditions* Futures for corn and Soybean meal** The effect will materialize as the inventory is Options for corn** consumed Type of Financial Instrument Effect on the Cash Flow *** -2.5% 2.5% 5.0% Forwards, knock out forwards, puts, collares and others under different amounts and conditions* -$40,933 -$12,952 $1,382 -5% 5% 10% Futures for corn and Soybean meal** -$4,372 $237 $2,541 Options for corn** $- $- $- A negative value means an unfavorable effect for the Company. * The reference value for the peso/USD as of March 31, 2010 is $12.357 ** The reference value is the Futures of corn for May 2010, $3.45 USD per bushel and of soybean meal for may 2010, $265.8 USD per 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 IR Contacts: Daniel Salazar, CFO Claudia Cabrera, IRO Ph. +52 (461) 618 3555 email@example.com In New York Grayling Lucia Domville Ph. (646) 284 9416 Lucia.Domville@us.grayling.com
SOURCE Industrias Bachoco S.A.B. de C.V.