Industrias Bachoco Announces Second Quarter 2008 Results
CELAYA, Mexico, July 24 /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, today announced its unaudited results for the second quarter ended June 30, 2008. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, 2008 data is presented in nominal pesos while that of 2007 is presented in constant pesos as of December 31, 2007. Highlights: -- The Company recorded sales of Ps. 4,987.5 million during the second quarter of 2008, 3.0% above the Ps. 4,842.1 million reached during the same period last year. -- Bachoco sales increased in most of its business lines: chicken, eggs, swine and other. -- The company reached positive operating results during the quarter, with an operating margin of 6.2% and EBIDTA margin of 9.2%. -- EPS were Ps. 0.32 (US$ 0.38 per ADS) versus Ps. 0.80 (US$ 0.93 per ADS) reached in 2Q07. CEO's Comments: Cristobal Mondragon, Bachoco's CEO, stated, "Second quarter results continued largely affected by the global trend of higher raw materials prices, which continued to affect the cost of grain and soybean meal. The cost of these ingredients rose even higher during this quarter and reached record levels. These increases coupled with a sluggish economic condition in our markets that did not allow us to fully transfer cost increases into chicken prices, and continued to affect the Company's results. "Despite said adverse difficulties, we were able to deliver positive results given our focus to reinforce productivity, and optimize our product mix, while keeping the best level of service for our customers. "Our commitment will continue to satisfy our customers' needs by providing high quality products, delivering satisfactory results to our shareholders and continuing to implement our growth plans," concluded Mr. Mondragon. Releases during the quarter: -- On April 16 the Company announced a partial fire at the secondary process of its plant located in Monterrey in northern Mexico. -- On May 29 the Company announced the construction of new farms to be built in the south of Mexico. To see the complete version of these releases, please visit our web page. http://www.bachoco.com.mx SECOND QUARTER 2008 RESULTS Net Sales Net sales for the quarter reached Ps. 4,987.5 million, 3.0% above the Ps. 4,842.1 million reported in 2Q07. This increase was mainly driven by the 1.3% increase in chicken sales, 15.9% in table eggs sales and 61.4% in swine sales, which was partially offset by 7.2% decrease in balanced feed sales.
Net Sales 2Q08 (%) 2Q07 (%) CHICKEN 77.8 79.1 EGGS 9.4 8.3 BALANCED FEED 7.4 8.2 SWINE 1.1 0.7 OTHER LINES 4.3 3.7 TOTAL COMPANY 100.0 100.0 Operating Results Bachoco's second quarter gross margin was 17.9%, lower than 23.1% reached in 2Q07. The decrease is mainly attributed to the constant increases in raw materials cost. The Company's operating profit was Ps. 311.6 million lower than Ps. 559.6 million reached in 2Q07. EBITDA for the quarter was Ps. 460.3 million, with a margin of 9.2%, lower than Ps. 698.5 million reached in the same period of 2007. Taxes Taxes recognized by the Company during the second quarter were Ps. 54.2 million. Net Income Net income for second quarter 2008 was Ps. 194.4 million, or Ps. 0.32 per share (US$0.38 per ADS), compared to net income of Ps. 479.2 million, or Ps. 0.80 per share (US$0.93 per ADS) reported in the same 2007 period. RESULTS BY BUSINESS SEGMENT Chicken Chicken sales rose 1.3% during 2Q08 as a result of 1.4% increase in price while volume sold remained at the same level of 2Q07. At the beginning of the quarter, chicken prices remained at a good level, but the situation changed towards the end of the quarter, as chicken prices dropped lower than expected. Table Eggs During this quarter, sales of table eggs were stronger, increasing by 15.9% from the same quarter last year, as a result of 23.8% increase in egg prices, due partially to a better balance in the market supply, as well as a better product mix of the company's products, with both issues contributing to partially offsetting a 6.4% decrease in volume. Balanced Feed Sales of Balanced Feed declined 7.2% when compared with 2Q07, despite a 16.9% price increase. Volume of balance feed sold dropped 20.7%, as a result of the large period of higher costs in our main raw material. Swine Sales of swine increased 61.4.0% from the previous year; the strong increase stems from a 23.8% volume gain and a 30.4% increase in swine prices, as the Mexican market's swine oversupply softened. Other Lines Sales of other lines rose 21.1% during 2Q08, mainly as a result of increases in sales of turkey and other lines.
FIRST HALF OF 2008 Net Sales Net sales for the first half of 2008 amounted to Ps. 9,730.8 million, 9.2% above Ps. 8,913.0 million reported in 1H07. The increase was mainly driven by the 8.1% increase in chicken sales, 20.8% in table eggs sales and 35.2% in swine sales, which was partially offset by 0.6% decrease in sales of balanced feed. Net Sales 1H 2008(%) 1H 2007(%) CHICKEN 77.0 77.8 EGGS 10.3 9.4 BALANCED FEED 7.6 8.3 SWINE 1.0 0.8 OTHER LINES 4.1 3.8 TOTAL COMPANY 100.0 100.0 Operating Results Bachoco's gross margin for the first half was 17.7%, lower than 21.0% in 1H07. The decrease is directly attributed to the standing increases in raw materials costs. The Company's operating profit was Ps. 556.0 million, lower than Ps. 786.8 million reached in 1H07. EBITDA was Ps. 853.7 million; lower than Ps. 1,066.4 million in the same period of 2007. EBITDA margin was 8.8%. Taxes Taxes recognized by the Company during the first half of the year were Ps. 117.3 million. Net Income Net income for first half of the year was Ps. 425.2 million, or Ps. 0.71 per share (US$0.83 per ADS), compared to net income of Ps. 728.0 million, or Ps. 1.21 per share (US$1.41 per ADS) reported in the same 2007 period. Balance Sheet The Company's financial structure remained healthy. Liquidity is solid with cash and cash equivalents of Ps. 2,878.8 million as of June 30, 2008. Total debt outstanding was Ps. 72.7 million as of June 30, 2008. CAPEX during the first half of 2008 amounted to Ps. 685.7 million. Adoption of New Accounting Standards As of January 1, 2008, the Company has adopted the changes to "Inflationary Effects" in accordance with the Mexican Accounting Principles. Due to the relatively low inflation that the country has consistently achieved during the past several years, a new accounting principle went into effect on January 1, 2008, which eliminates the recognition of inflationary effects in its financial information. Consequently, financial information corresponding to the year 2007 is expressed in millions of Mexican pesos with purchasing power as of December 31, 2007, while the financial information for the year 2008 is stated in current or nominal Mexican pesos. Company Description Industrias Bachoco S.A.B. de C.V. (also referred in this report as Bachoco) was founded 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 and balanced feed, and the Company also is present in other business like swine, beef, margarine and turkey. The Company's headquarters are in Celaya, Guanajuato. Industrias Bachoco made an initial public stock offering in September 1997. Its securities are listed and traded on the BMV (Bachoco) 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.
IR Contacts: Daniel Salazar. CFO Caludia Cabrera. IRO Ph. 011 52 (461) 618 35 55 firstname.lastname@example.org In New York: Lucia Domville Grayling Global Ph. (646) 284 9416 email@example.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. Consolidated Statements of Income SECOND QUARTER U.S.D. Mexican Pesos 2008(1) 2008(2) 2007(3) Net Sales $484 Ps 4,987 Ps 4,842 Cost of Sales 397 4,093 3,721 Gross Profit (loss) 87 895 1,121 Selling, general and administrative expenses 57 583 561 Operating Income (loss) 30 312 560 Comprehensive financing (cost) income (5) (47) 38 Interest income 3 31 69 Interest expense and financing cost 5 49 20 Foreign exchange gain (loss), net (3) (30) (11) Other income (expense) net (1) (14) 12 Income before income tax, asset tax 24 250 610 Total income taxes 5 54 131 Income tax, asset tax 2 24 23 Deferred income taxes 3 30 108 Net Income 19 196 479 Minority net income 0 2 0 Mayority net income 19 194 479 Weighted average shares outstanding (in thousands) 600,000 600,000 600,000 Net majority Income per share (in U.S.D. per ADR) 0.38 0.32 0.80 (1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035) (2) Million of constant pesos as of June 30, 2008 (3) Million of constant pesos as of December 31, 2007 INDUSTRIAS BACHOCO, S.A.B. DE C.V. Consolidated Statements of Income FIRST HALF U.S.D. Mexican Pesos 2008(1) 2008(2) 2007(3) Net Sales $944 Ps 9,731 Ps 8,913 Cost of Sales 777 8,011 7,041 Gross Profit (loss) 167 1,720 1,872 Selling, general and administrative expenses 113 1,164 1,086 Operating Income (loss) 54 556 787 Comprehensive financing (cost) income (2) (17) 99 Interest income 9 98 154 Interest expense and financing cost 7 70 37 Foreign exchange gain (loss), net (4) (45) (18) Other income (expense) net 1 6 54 Income before income tax, asset tax 53 545 939 Total income taxes 11 117 209 Income tax, asset tax 12 127 72 Deferred income taxes (1) (9) 138 Net Income 42 428 730 Minority net income 0 2 2 Majority net income 41 425 728 Weighted average shares outstanding (in thousands) 600,000 600,000 600,000 Net mayority Income per share (in U.S.D. per ADR) 0.83 0.71 1.21 (1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035) (2) Million of constant pesos as of June 30, 2008 (3) Million of constant pesos as of December 31, 2007 Industrias Bachoco, S.A.B. de C.V. Condensed Consolidated Balance Sheets U.S.D. Mexican Pesos 2008(1) 2008(2) 2007(3) ASSETS Current assets Cash and cash equivalents $279 Ps 2,879 Ps 3,480 Total accounts receivable 124 1,283 946 Inventories 434 4,473 3,838 Other current assets - - Total current assets 838 8,634 8,264 Net property, plant and equipment 1,032 10,637 9,829 Other non current assets 36 374 378 TOTAL ASSETS $1,907 Ps 19,645 Ps 18,470 LIABILITIES Current liabilities Notes payable to banks 6 67 61 Accounts payable 131 1,348 848 Other taxes payable and other accruals 59 611 573 Total current liabilities 197 2,025 1,482 Long-term debt 7 73 62 Labor obligations 5 56 44 Deferred income taxes and others 188 1,937 2,338 Total long-term liabilities 201 2,066 2,445 TOTAL LIABILITIES $397 Ps 4,091 Ps 3,926 STOCKHOLDERS' EQUITY Majority stockholder's equity: Capital stock 223 2,295 2,295 Paid-in capital 64 660 660 Reserve for repurchase of shares 24 244 244 Retained earnings 1,471 15,156 14,250 Net majority income of the year 41 425 728 Deficit from restatement of stockholder's equity (363) (3,738) (3,664) Derivate financial instruments 46 469 (15) Total majority stockholder's equity 1,505 15,510 14,498 Minority interest 4 44 46 TOTAL STOCKHOLDERS' EQUITY 1,510 15,554 14,544 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,907 Ps 19,645 Ps 18,470 (1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035) (2) Million of constant pesos as of June 30, 2008 (3) Million of constant pesos as of December 31, 2007 Industrias Bachoco, S.A.B. de C.V. Condensed Consolidated Statements of Changes in Financial Position U.S.D. Mexican Pesos 2008(1) 2008(2) 2007(3) Operating Activities: Net Income $42 Ps. 428 Ps. 730 Adjustments to Reconcile Net Income to Resources Provided by Operating Activities: Depreciation and Others 29 295 278 Changes in Operating Assets and Liabilities 35 357 (900) Deferred Income Taxes (42) (438) 156 Resources Provided by Operating Activities $62 Ps. 643 Ps. 264 Financing Activities: Increase of Capital Stock 0 0 (0) Proceeds from Long-term Debt - - 32 Proceeds from Short-term Debt 12 123 51 Repayment of Long-term Debt and Notes Payable 9 94 (5) Decrease in Long-term Debt in Constant Pesos (18) (187) (0) Cash Dividends Paid (11) (118) (122) Resources Provided by (Used in) Financing Activities $(9) Ps. (88) Ps. (44) Investing Activities: Acquisition of Property, Plant and Equipment (67) (686) (287) Minority Interest (0) (3) 1 Others (3) (27) (38) Resources Used in Investing Activities $(69) Ps. (715) Ps. (324) Net (Decrease) Increase in Cash and Cash Equivalents $(16) Ps. (161) Ps. (104) Cash and Cash Equivalents at Beginning of Period 295 3,040 3,584 Cash and Cash Equivalents at End of Period $279 Ps. 2,879 Ps. 3,480 (1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035) (2) Million of constant pesos as of June 30, 2008 (3) Million of constant pesos as of December 31, 2007
SOURCE Industrias Bachoco S.A.B. de C.V.
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