Industrias Bachoco Announces Fourth Quarter and 2009 Full Year Results
CELAYA, Mexico, Feb. 4 /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 fourth quarter and full year ended December 31st, 2009. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, data is presented in nominal Mexican pesos.
Highlights:
-- Total sales for the fourth quarter rose 2.2% and 15.7% during 2009
-- The Company continued to record historic chicken volume sales
-- EBITDA margin was 3.5% for 4Q09 and 8.9% in 2009, up from 4.2% in 2008.
-- Earnings per ADS in 2009 reached $1.23 USD compared to a net loss of $0.84 USD in 2008. Loss per ADS in 4Q09 at $0.17 USD was better than the loss recorded in the same year-ago period.
-- In the fourth quarter, the Company recorded a one-time charge related to deferred taxes following the changes in the Mexican income tax rate
CEO's Comments:
Cristobal Mondragon, Bachoco's CEO, stated, "During the fourth quarter, we observed lower raw materials prices, which coupled with our efficiency strategy, allowed us to improve the cost of sales.
"The chicken industry was also stable during the quarter; there was a good level in the supply and demand balance, especially around the holiday season. However, prices remained under pressure, and were mainly attributed to a weaker purchasing power of the Mexican population as the economy slowed down. We expect prices to improve as the Mexican economy shows signs of recovery.
"Our egg business line was strong during the year given that eggs are the lowest-cost animal protein in Mexico. Also, our balanced feed business line results improved during the year, even when the sales volume continued to be affected.
"At the year end, the balance was positive, reaching significant improvements from last year: we recorded the highest chicken volume sales, and positive operating and net margins, while we increased our chicken market share as a result of our latest business acquisition. Our leadership in Mexico remains solid as well as our financial position," concluded Mr. Mondragon.
FOURTH QUARTER 2009 RESULTS
Net sales 4Q09 (%) 4Q08 (%)
Chicken 77.2 77.7
Eggs 10.4 10.0
Balanced feed 6.1 6.4
Swine 1.1 1.1
Other lines 5.2 4.8
Total Sales 100.00% 100.00%
Net Sales
Net sales for the fourth quarter amounted to Ps. 5,800.3 million, 2.2% above the Ps. 5,674.3 million reported in 4Q08. This increase was mainly driven by a 1.6% increase in chicken sales, a 6.3% increase in table eggs sales, and a 2.8% increase in swine sales; which were partially offset by a 2.3% decrease in balanced feed sales.
Operating Results
Bachoco's fourth quarter gross margin was 12.2%, above the 9.8% registered in the same 2008 quarter. The increase in the gross margin is attributed to the 5.5% increase in sales volume, which was partially offset by a 3.2% decrease in the sale prices.
The Company had an operating profit of Ps. 38.0 million, compared to an operating loss of Ps. 79.1 million in the same 2008 quarter. The operating margin for 4Q09 was 0.7%.
EBITDA amounted to Ps. 205.3 million, compared with Ps. 76.8 million reported in the same 2008 quarter.
Taxes
Total taxes for the fourth quarter were Ps. 188.2 million. This amount includes a one-time charge of Ps 188.4 million related to deferred taxes, which resulted from the change in the rate of income tax for the agricultural sector in Mexico that took effect as of January 1st, 2010. This effect does not affect the Company's cash flow.
Comprehensive Financial Income (Cost)
The Company's financial comprehensive cost was Ps. 0.3 million during the quarter, compared to a financial comprehensive cost of Ps. 1,056.0 million reported in the same last year-ago quarter.
Net Majority Income (loss)
Net majority loss for the fourth quarter was PS. 109.5 million, or Ps. 0.18 per share (US$0.17 per ADS), compared to a net majority loss of Ps. 873.5 million, or Ps. 1.46 per share (US$1.34 per ADS) reported in the same 2008 period.
RESULTS BY BUSINESS SEGMENT
Chicken
Sales of chicken products increased 1.6%, while chicken prices decreased 6.2% during the quarter and chicken volume grew 8.4%. Even when the sales and sales volume increased during the quarter, chicken prices remained affected, and declined significantly from 4Q08, mainly due to the weaker purchasing power of Mexican consumers.
Table Eggs
Demand for table egg products remained strong during the fourth quarter. Sales of table eggs increased by 6.3% during the quarter as egg volume rose 6.4% from the previous year; this result was partially offset by a slight decrease in egg prices of 0.1%.
Balanced Feed
Sales of balanced feed decreased by 2.3%, mainly due to a 0.3% increase in prices and 2.0% decrease in balanced feed volume. This business line remained affected by higher costs and decreased demand.
Swine
The swine business line was stable during the 4Q09. Sales rose 2.8% during the fourth quarter, as a result of a 2.4% gain in swine prices and a 0.4% increase in swine volumes when compared to the same 2008 quarter.
Other Lines
Sales of other lines increased 9.5% when compared with 4Q08. The main products sold were turkey and by-products.
YEAR 2009
Net sales 2009 (%) 2008 (%)
Chicken 78.3 76.9
Eggs 10.1 10.6
Balanced feed 6.3 7.3
Swine 1.0 1.0
Other lines 4.3 4.2
Total Sales 100.00% 100.00%
Net Sales
Net sales for the year 2009 amounted to Ps. 23,271.8 million, 15.7% above the Ps. 20,109.6 million reported in 2008. The increase was mainly driven by the 17.8% increase in chicken sales, 11.8% in table eggs sales and 11.7% in swine sales; which were partially offset by a slight decrease in balanced feed sales of 0.4%.
Operating Results
The Company's gross margin for 2009 was 16.9%, higher than the 13.1% recorded in 2008, and was attributed to higher sales in most of our business lines, mainly in chicken and table eggs products. The Company's operating profit, of Ps. 1,426.7 million, compares favorably to an operating profit of Ps. 233.2 million recorded in 2008. EBITDA, of Ps. 2,079.5 million, was well above the Ps. 837.8 million recorded in 2008. EBITDA margin for year 2009 was 8.9%.
Taxes
Total taxes registered for the year amounted to Ps. 412.2 million.
Net Majority Income
Net majority income for the year was Ps. 807.0 million, or Ps. 1.35 per share (US$1.23 per ADS), compared to net loss of Ps. 548.5 million, or Ps. 0.91 per share (US$0.84 per ADS) reported in 2008.
Balance Sheet
Liquidity is solid with cash and cash equivalents amounting to Ps. 2,502.7 million as of December 31, 2009. The total debt outstanding for the same period was Ps. 963.8 million.
Capital Expenditures
CAPEX during the year 2009 amounted to Ps.835.7 million.
Exhibits:
A.- Consolidated Balance Sheets
B.- Consolidated Statement of Income
C.- Consolidated Statement of Cash Flows
D.- Derivatives Position Report
Company Description
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.
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.
Exhibit A: Consolidated Balance Sheets
Industrias Bachoco, S.A.B. de C.V.
Condensed Consolidated Balance Sheets
U.S.D. Mexican Pesos
2009(1) 2009(2) 2008(2)
As of As of
December December
31, 31,
ASSETS
Current assets
Cash and cash equivalents $191 Ps 2,503 Ps 1,972
Total accounts receivable 114 1,498 1,568
Inventories 346 4,519 5,157
Other current assets - - -
Total current assets 651 8,519 8,698
Net property, plant and
equipment 834 10,910 10,689
Other non current assets 31 409 366
TOTAL ASSETS $ 1,517 Ps 19,838 Ps 19,753
LIABILITIES
Current liabilities
Notes payable to banks 45 592 229
Accounts payable 132 1,723 1,942
Other taxes payable and other
accruals 28 361 365
Total current liabilities 205 2,675 2,536
Long-term debt 28 372 397
Labor obligations 8 104 78
Deferred income taxes and
others 156 2,040 2,686
Total long-term liabilities 192 2,515 3,162
TOTAL LIABILITIES $ 397 Ps 5,191 Ps 5,698
STOCKHOLDERS' EQUITY
Majority stockholder's equity:
Capital stock 175 2,295 2,295
Paid-in capital 57 745 744
Reserve for repurchase of
shares 12 159 159
Retained earnings 810 10,591 11,418
Net majority income of the year 62 807 (549)
Deficit from restatement of
stockholder's equity - - -
Derivate financial instruments - - (55)
Total majority stockholder's
equity 1,116 14,598 14,013
Minority interest 4 50 43
TOTAL STOCKHOLDERS' EQUITY 1,120 14,648 14,056
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,517 Ps 19,838 Ps 19,753
(1) For reference, in millions of U.S. dollars using an exchange rate of
$13.08
Source: Mexico's National Bank, as of December 31, 2009.
(2) Millions of Mexican nominal pesos
Exhibit 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
2009(1) 2009(2) 2008(2)
Net sales $ 443 Ps 5,800 Ps 5,674
Cost of sales 389 5,093 5,118
Gross profit (loss) 54 708 556
Selling, general and
administrative expenses 51 670 635
Operating income (loss) 3 38 (79)
Other income (expense) net 3 43 13
Comprehensive financing (cost)
income (0) (0) (1,056)
Interest income 2 24 (539)
Interest expense and financing
expenses (2) (25) (672)
Foreign exchange gain (loss),
net (0) (2) 155
Other financial income
(expense) net 0 3 -
Income before income tax, asset
tax 6 81 (1,122)
Total income taxes 14 188 (247)
Income tax, asset tax 2 31 9
Deferred income taxes 12 157 (256)
Net income $ (8) Ps (107) Ps (875)
Minority net income 0 2 (2)
Majority net income (8) (109) (873)
weighted average shares
outstanding (in thousands) 599,995 599,995 600,000
Net majority Income per share (in
U.S.D per ADS) (0.17) (0.18) (1.46)
(1) For reference, in millions of U.S. dollars using an exchange rate
of $13.08
Source: Mexico's National Bank, as of December 31, 2009.
(2) Millions of Mexican nominal pesos
INDUSTRIAS BACHOCO, S.A.B. DE C.V.
Consolidated Statements of Income
-unaudited-
FULL YEAR
U.S.D. Mexican Pesos
2009(1) 2009(2) 2008(2)
Net sales $ 1,779 Ps 23,272 Ps 20,110
Cost of sales 1,478 19,331 17,482
Gross profit (loss) 301 3,941 2,628
Selling, general and
administrative expenses 192 2,514 2,395
Operating income (loss) 109 1,427 233
Other income (expense) net (5) (63) (14)
Comprehensive financing (cost)
income (10) (134) (1,308)
Interest income 10 131 -
Interest expense and financing
expenses (7) (96) (853)
Foreign exchange gain (loss),
net (3) (39) 160
Other financial income
(expense) net (10) (130) (615)
Income before income tax, asset
tax 94 1,230 (1,090)
Total income taxes 32 412 (543)
Income tax, asset tax 8 103 78
Deferred income taxes 24 309 (621)
Net income 63 818 (546)
Minority net income 1 11 2
Majority net income 62 807 (549)
weighted average shares
outstanding (in thousands) 599,946 599,946 600,000
Net majority Income per share (in
U.S.D per ADS) 1.23 1.35 (0.91)
(1) For reference, in millions of U.S. dollars using an exchange rate
of $13.08
Source: Mexico's National Bank, as of December 31, 2009.
(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. 2009(2) 2008(2)
As of As of
2009(1) December 31, December 31,
NET MAJORITY INCOME BEFORE
INCOME TAX $ 94 Ps. 1,230 Ps. (1,090)
ITEMS THAT DO NOT REQUIRE
CASH: 31 407 559
Other Items 31 407 559
ITEMS RELATING TO INVESTING
ACTIVITIES: 48 626 648
Depreciation and others 50 653 605
Income (loss) on sale
of plant and equipment (1) (16) 46
Other Items (1) (11) (2)
ITEMS RELATING TO FINANCING
ACTIVITIES: 17 227 238
Interest income
(expense) 7 96 853
Other Items 10 131 (615)
NET CASH GENERATED FROM NET
INCOME BEFORE TAXES $ 190 Ps. 2,489 Ps. 355
CASH GENERATED OR USED IN THE
OPERATION (33) (430) (474)
Decrease (increase) in
accounts receivable (0) (2) (115)
Decrease (increase) in
inventories 46 599 (1,298)
Increase (decrease) in
accounts payable (20) (260) 777
Income taxes paid (59) (768) 161
NET CASH FLOW FROM FINANCING
ACTIVITIES $ 157 Ps. 2,059 Ps. (119)
INVESTING ACTIVITIES
NET CASH FLOW FROM INVESTING
ACTIVITIES (62) (812) (1,096)
Acquisition of
property, plant and
equipment (64) (836) (1,053)
Proceeds from sales of
property plant and
equipment (2) (21) 53
Other Items 3 45 (96)
CASH FLOW SURPLUS
(REQUIREMENTS OF) TO BE USED
IN
FINANCING ACTIVITIES $ 95 Ps. 1,246 Ps. (1,215)
FINANCING ACTIVITIES
Net cash provided by
financing activities: 7 98 147
Proceeds from loans 154 2,016 976
Principal payments on
loans (128) (1,678) (459)
Dividends paid (19) (250) (354)
Other items 1 10 (16)
NET INCREASE (DECREASE) IN
CASH AND EQUIVALENTS 41 530 (1,068)
CASH AND INVESTMENTS AT THE
BEGINNING OF YEAR 151 1,972 3,040
CASH AND INVESTMENTS AT END
OF PERIOD $ 191 Ps. 2,503 Ps. 1,972
(1) For reference, in millions of U.S. dollars using an exchange rate of
$13.08
Source: Mexico's National Bank, as of December 31, 2009.
(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 December 31, 2009 Quarter: 4
Table 1
Type of Objective
Financial of the
Instrument Instrument Notional
Forwards, knock out Hedge and $300,840
forwards, puts, negotiation
collars and others
under different
amounts and conditions
Futures for corn Hedge $29,054
Options for corn Hedge and $1,651
negotiation
Type of
Financial Value of the Related
Instrument Instrument Commodity
4Q-2009 3Q-2009
Forwards, knock out $13.08 $13.50
forwards, puts,
collars and others
under different
amounts and conditions
Futures for corn Corn of March 2010: Corn of December and
$4.145 USD/bushel March: $3.4400 and
$3.5675 USD/bushel
respectively. Soybean
meal of Dec and Jan.
$285.5 and $282.7
USD/ton.
Options for corn Corn of March 2010: Corn: $3.4400
$4.145 USD/per bushel USD/bushel for
December and $3.5675
for January 2010.
Type of Reasonable Amounts Guaranties
Financial Value Due by Required
Instrument Year
4Q-2009 3Q-2009
Forwards, knock out $2,004 $27,246
forwards, puts,
collars and others
under different
amounts and conditions
Futures for corn -$1,404 -$32,870 The deals consider
the possibility of
2010 margin calls but
and not another kind
2009 of guarantee
Options for corn $1,651 $699
None of the financial instruments exceed 5% of total assets as of December 31, 2009.
A negative value means an unfavorable effect for the Company.
The notional value represents the net position as of December 31, 2009 at the exchange rate of Ps.13.08 per USD.
All the instruments will be due in 2010.
Industrias Bachoco, S.A.B. de C.V.
Thousands of Mexican Pesos, as of December 31, 2009 Quarter: 4
Table 2
Type of Financial Instrument Reasonable
Value as of Value of the Related
December 31, Commodity-reference value
2009 -5.0% 2.5% 5.0%
Forwards, knock out forwards,
puts, collars and others
under different amounts and
conditions* $2,004 $12.43 $13.41 $13.73
-5% 5% 10%
Futures for corn** -$1,404 $3.9378 $4.3523 $4.5595
Options for corn** $1,651 $3.94 $4.35 $4.56
Type of Financial Instrument Effect on the Effect on the Cash Flow ***
Income -5.0% 2.5% 5.0%
Statement
Forwards, knock out forwards,
puts, collars and others
under different amounts and
conditions* Direct -$2,332 $15,582 $42,336
-5% 5% 10%
Futures for corn** The effect will
materialize as
the inventory
is consumed -$2,786 -$21 $1,361
Options for corn** $2,129 $1,620 $1,886
A negative value means an unfavorable effect for the Company.
*The notional value represents the net position as of December 31, 2009 at an exchange rate of Ps. 13.08 per USD.
** The reference value is the Futures and Options of corn for March 2010. $4.145 USD per bushel.
*** 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 protected]
In New York
Grayling
Lucia Domville
Ph. (646) 284 9416
[email protected]
SOURCE Industrias Bachoco S.A.B. de C.V.
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