Industrias Bachoco Announces Second Quarter 2019 Results
CELAYA, Mexico, July 22, 2019 /PRNewswire/ -- Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the second quarter ("2Q19") and first half ("1H19") 2019 ended on June 30, 2019. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS 2019
- Net sales increased 4.1% in 2Q19 and decreased 1.0% in 1H19
- EBITDA margin was 14.7% for 2Q19 and 10.1% in 1H19
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This second quarter, we observed good levels of demand, particularly in Mexico. This led to improvements in prices for the poultry industry, which is in line with its seasonal behavior.
This improvement in prices, particularly in our poultry business line, allowed us to reach an increase in total sales of 4.1% for 2Q19 when compared to the same period of 2018. This effect, in combination with a lower cost of sales in terms of unit cost, led us to a gross margin of 22% for 2Q19 compared to the 19.2% of 2Q18.
We managed to keep our SG&A under control as a percentage of sales, 9.2% for the quarter and 9.7% for the first half of 2019 which is in line with the values reported for the same periods of 2018.
As a result, our operating profit for the quarter was $2,163.8 million which is 30.6% higher than the $1,656.4 million reported in 2Q18.
We reported and EBITDA of $2,483.3 million in 2Q19 which is 25.7% higher than the $1,976.0 million reported in 2Q18, that is 14.7% and 12.2% EBITDA margin for each period respectively. For the first half of the year our EBITDA margin was 10.1%, compared to 13.0% EBITDA margin of the same period of 2018.
We continue to keep focus on adding value to our shareholders. In 2Q19 we reported earnings per share of $2.65 compared to $2.62 of 2Q18; for the first half of 2019 we reported earnings per share of $3.15 compared to $4.72 for 1H18.
Our financial position remains solid. By the end of the quarter we reported a net cash of $13,560 million which is allowing us to continue with our growth plans."
EXECUTIVE SUMMARY
The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2018.
QUARTERLY RESULTS
NET SALES BY GEOGRAPHY |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
16,884.1 |
16,213.6 |
670.5 |
4.1 |
|
Net sales in Mexico |
12,537.4 |
11,553.9 |
983.4 |
8.5 |
|
Net sales in the U.S. |
4,346.7 |
4,659.7 |
(313.0) |
(6.7) |
|
NET SALES BY SEGMENT |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
16,884.1 |
16,213.6 |
670.5 |
4.1 |
|
Poultry |
15,259.2 |
14,731.9 |
527.3 |
3.6 |
|
Other |
1,624.9 |
1,481.7 |
143.2 |
9.7 |
|
NET VOLUME SOLD BY SEGMENT In tons |
Change |
|||||
2Q19 |
2Q18 |
Volume |
% |
|||
Total sales volume: |
575,729 |
551,287 |
24,442.1 |
4.4 |
||
Poultry |
436,570 |
431,315 |
5,254.8 |
1.2 |
||
Others |
139,159 |
119,972 |
19,187.3 |
16.0 |
||
The Company's 2Q19 net sales totaled $16,884.1 million; $670.5 million or 4.1% more than $16,213.6 million reported in 2Q18. The increase is a result of better prices in poultry and higher volume sold in poultry and balanced feed.
In 2Q19, sales of our U.S. operations represented 25.8% of our total sales compared to 28.7% in 2Q18.
GROSS PROFIT |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Cost of sales |
13,164.5 |
13,108.3 |
56.2 |
0.43 |
|
Gross profit |
3,719.6 |
3,105.3 |
614.3 |
19.78 |
|
Gross margin |
22.0% |
19.2% |
- |
- |
|
In 2Q19, cost of sales was $13,164.5 million; $56.2 million or 0.43% higher than $13,108.3 million reported in 2Q18. This increase was due higher volume sold.
The Company´s gross profit in 2Q19 was $3,719.6 million, 19.8% higher than the gross profit of $3,105.3 million in 2Q18, with a gross margin of 22.0% for 2Q19 vs 19.2% in 2Q18. This is a result of higher prices in poultry.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")
|
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Total SG&A |
1,550.8 |
1,489.1 |
61.7 |
4.1 |
|
Total SG&A expenses in 2Q19 were $1,550.8 million; $61.7 million higher than the $1,489.1 million reported in 2Q18. Total SG&A expenses as a percentage of net sales represented 9.2% in 2Q19 and 9.2% in 2Q18.
OTHER INCOME (EXPENSE), NET |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Other income (expense), net |
(5.0) |
40.2 |
(45.2) |
(112.5) |
|
This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets.
In 2Q19, we recorded other expenses of $5.0 million, compared with other income of $40.2 million reported in 2Q18.
OPERATING INCOME |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Operating income |
2,163.8 |
1,656.4 |
507.4 |
30.6 |
|
Operating margin |
12.8% |
10.2% |
- |
- |
|
Operating income in 2Q19 totaled $2,163.7 million; $507.4 million higher than $1,656.4 million reported in 2Q18. This represents an operating margin of 12.8% for 2Q19, higher when compared to the same period of 2018. The increase in operating income is mainly attributed to higher poultry prices in 2Q19.
NET FINANCIAL INCOME |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Net Financial Income |
91.6 |
562.1 |
(470.6) |
(83.7) |
|
Financial Income |
184.4 |
312.8 |
(128.4) |
(41.0) |
|
Financial Expense |
92.8 |
(249.3) |
342.2 |
(137.2) |
|
In 2Q19, the Company reported net financial income of $91.6 million, compared to $562.1 million reported in the same period of 2018. The decrease is mainly attributed to lower exchange rate gains, as the peso appreciated during the quarter.
TAXES FOR THE PERIOD |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Total Taxes |
663.4 |
641.8 |
21.6 |
3.4 |
|
Income tax |
652.2 |
563.2 |
89.1 |
15.8 |
|
Deferred income tax |
11.2 |
78.7 |
(67.5) |
(85.8) |
|
Total taxes for the 2Q19 were $663.4 million, compared with total taxes of $641.8 million in the same period of 2018.
NET INCOME |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Net income |
1,591.9 |
1,576.7 |
15.2 |
1.0 |
|
Net margin |
9.4% |
9.7% |
- |
- |
|
Basic and diluted earnings per share1 |
2.65 |
2.62 |
0.0 |
n/a |
|
Basic and diluted earnings per ADR2 |
31.78 |
31.49 |
0.3 |
n/a |
|
Weighted average Shares outstanding3 |
600,000 |
600,000 |
- |
- |
|
1 In pesos |
|||||
2 In pesos, one ADR equals to twelve shares |
|||||
3 In thousands of shares |
|||||
The net income for 2Q19 was $1,591.9 million, representing a basic and diluted income of $2.65 pesos per share, compared with a net income of $1,576.9 million, which represented $2.62 pesos of net income per share in 2Q18. This increase is mainly attributed to higher operating results. Net margin in 2Q19 was 9.4% compared to 9.7% reported in 2Q18.
EBITDA |
|||||
In millions of pesos |
2Q19 |
2Q18 |
Change |
||
$ |
$ |
$ |
% |
||
Net income |
1,588.8 |
1,574.3 |
14.5 |
0.9 |
|
Income tax expense (benefit) |
663.4 |
641.8 |
21.6 |
3.4 |
|
Result in associates |
3.1 |
2.3 |
0.7 |
31.0 |
|
Net finance (income) expense |
(91.6) |
(562.1) |
470.6 |
(83.7) |
|
Depreciation and amortization |
319.6 |
319.6 |
(0.0) |
(0.0) |
|
EBITDA |
2,483.3 |
1,976.0 |
507.4 |
25.7 |
|
EBITDA Margin (%) |
14.7% |
12.2% |
- |
- |
|
Net revenues |
16,884.1 |
16,213.6 |
670.5 |
4.1 |
|
EBITDA in 2Q19 reached $2,483.3 million representing an EBITDA margin of 14.7%, compared to an EBITDA of $1,976.0 million in 2Q18, with an EBITDA margin of 12.2%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY |
|||||
In millions of pesos |
1H19 |
1H18 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
31,207.7 |
31,516.6 |
(308.9) |
(1.0) |
|
Net sales in Mexico |
22,834.0 |
22,645.4 |
188.6 |
0.8 |
|
Net sales in the U.S. |
8,373.8 |
8,871.2 |
(497.4) |
(5.6) |
|
NET SALES BY SEGMENT |
|||||
In millions of pesos |
1H19 |
1H18 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
31,207.7 |
31,516.6 |
(308.9) |
(1.0) |
|
Poultry |
28,112.0 |
28,490.6 |
(378.6) |
(1.3) |
|
Other |
3,095.7 |
3,026.0 |
69.7 |
2.3 |
|
NET VOLUME SOLD BY SEGMENT In metric tons |
Change |
|||||
1H19 |
1H18 |
Volume |
% |
|||
Total sales volume: |
1,128,905 |
1,098,037 |
30,867 |
2.81 |
||
Poultry |
862,315 |
853,496 |
8,819 |
1.03 |
||
Others |
266,589 |
244,541 |
22,049 |
9.02 |
||
During the first half of 2019, net sales totaled $31,207.7 million; $308.9 million or 1.0% less than $31,516.6 million reported in the same period of 2018. The decrease in sales is mainly attributable to lower prices in our main product lines when compared to the first half of 2018.
In 1H19, sales of our U.S. operations represented 26.8% of our total sales, compared with 28.1% in 1H18.
OPERATING RESULTS |
|||||
In millions of pesos |
1H19 |
1H18 |
Change |
||
$ |
$ |
$ |
% |
||
Cost of Sales |
25,680.2 |
25,194.1 |
486.1 |
1.9 |
|
Gross Profit |
5,527.5 |
6,322.5 |
(795.0) |
(12.6) |
|
Total SG&A |
3,025.2 |
2,874.6 |
150.6 |
5.2 |
|
Other Income (expense) |
(3.4) |
31.0 |
(34.4) |
(111.0) |
|
Operating Income |
2,498.9 |
3,478.9 |
(979.9) |
(28.2) |
|
Net Financial Income |
167.6 |
468.4 |
(300.8) |
(64.2) |
|
Income Tax |
772.1 |
1,109.6 |
(337.6) |
(30.4) |
|
Net Income |
1,894.4 |
2,837.6 |
(943.2) |
(33.2) |
|
In 1H19, the cost of sales totaled $25,680.2 million; $486.1 million or 1.9% higher than $25,194.1 million reported in 1H18. The increase in cost of sales is mainly attributed to higher volume sold.
As a result, we reached a gross profit of $5,527.5 million and a gross margin of 17.7% in 1H19, when compare to $6,322.5 million of gross profit and a margin of 20.1% reached in the same period of 2018.
Total SG&A expenses in 1H19 were $3025.2 million; $150.6 million or 5.2% more than the $2,874.6 million reported in 1H18. In 1H19 total SG&A expenses as a percentage of net sales represented 9.7% compared with 9.1% in 1H18.
In 1H19 we had other expenses of $3.4 million, compared with other income of $31.0 million reported in 1H18.
The operating income in 1H19 was $2,498.9 million, which represents an operating margin of 8.0%, a decrease of 28.2% from an operating income of $3,478.9 million and an operating margin of 11.0% in 1H18.
The net financial income in 1H19 was $167.6 million, lower when compared to a net financial income of $468.4 million in 1H18.
Total taxes were $772.1 million as of June 30, 2019. These taxes include $701.6 million of income tax and $70.5 million of deferred income taxes. This figure compares to total taxes of $1,109.6 million in 1H18; the decrease was mainly attributed to a lower income before taxes.
All the above resulted in a net income of $1,894.4 million or 6.1% of net margin in the 1H19, which represents $3.15 pesos of earnings per share; while in the 1H18 the net income totaled $2,837.6 million, 9.0% of net margin and $4.72 pesos of net income per share.
EBITDA |
|||||
In millions of pesos |
1H19 |
1H18 |
Change |
||
$ |
$ |
$ |
% |
||
Net controlling interest profit |
1,887.6 |
2,830.0 |
(942.4) |
(33.3) |
|
Income tax expense (benefit) |
772.1 |
1,109.6 |
(337.6) |
(30.4) |
|
Result in associates |
6.8 |
7.6 |
(0.8) |
(10.4) |
|
Net finance (income) expense |
(167.6) |
(468.4) |
300.8 |
(64.2) |
|
Depreciation and amortization |
639.3 |
629.3 |
10.0 |
1.6 |
|
EBITDA |
3,138.2 |
4,108.2 |
(970.0) |
(23.6) |
|
EBITDA Margin (%) |
10.1% |
13.0% |
- |
- |
|
Net revenues |
31,207.7 |
31,516.6 |
(308.9) |
(1.0) |
|
EBITDA in 1H19 reached $3,138.2 million, representing an EBITDA margin of 10.1%, compared to EBITDA of $4,108.2 million in 1H18, with an EBITDA margin of 13.0%.
BALANCE SHEET
BALANCE SHEET DATA |
|||||
In millions of pesos |
June 30, 2018 |
Dec. 31st, 2018 |
Change |
||
$ |
$ |
$ |
% |
||
TOTAL ASSETS |
54,826.4 |
52,865.6 |
1,960.8 |
3.7 |
|
Cash and cash equivalents |
18,553.1 |
18,458.5 |
94.6 |
0.5 |
|
Accounts receivable |
4,909.9 |
3,486.5 |
1,423.4 |
40.8 |
|
TOTAL LIABILITIES |
15,727.3 |
14,699.9 |
1,027.4 |
7.0 |
|
Accounts payable |
3,554.1 |
4,228.4 |
(674.3) |
(15.9) |
|
Short-term debt |
3,440.2 |
3,492.8 |
(52.6) |
(1.5) |
|
Long-term debt |
1,552.8 |
1,544.8 |
8.0 |
0.5 |
|
TOTAL STOCKHOLDERS' EQUITY |
39,099.1 |
38,165.7 |
933.4 |
2.4 |
|
Capital stock |
1,174.4 |
1,174.3 |
0.1 |
0.0 |
|
Cash and equivalents as of June 30, 2019 totaled $18,553.1 million vs $18,458.6 million as of December 31, 2018.
Total debt as of June 30, 2019 was $4,993.0 million, compared to $5,037.6 million reported as of December 31, 2018, mainly as a result of higher long-term bank debt.
Net cash as of June 30, 2019 was $13,560.0 million, compared to net cash of $13,420.9 million as of December 31, 2018.
CAPITAL EXPENDITURES |
|||||
In millions of pesos |
1H19 |
1H18 |
Change |
||
$ |
$ |
$ |
% |
||
Capital Expenditures |
824.6 |
780.5 |
44.1 |
5.6 |
|
Total CAPEX for the 1H19 was $824.6 million and $780.5 million in 1H18, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION
As of June 28, 2019 |
||
Total Shares |
600,000,000 |
|
Total free float |
26.75% |
|
Market cap (millions of pesos) |
$48,240 |
|
Source: Yahoo Finances |
||
SHARE PRICE
SHARE PRICE
|
|||||||||||||
Mexican Stock Exchange |
The New York Stock Exchange |
||||||||||||
Ticker Symbol: Bachoco |
Ticker Symbol: IBA |
||||||||||||
In nominal pesos per Share |
In U.S. Dollar per ADR |
||||||||||||
Month |
High |
Low |
Close |
High |
Low |
Close |
|||||||
Jun-19 |
84.98 |
79.99 |
80.40 |
52.92 |
50.11 |
50.67 |
|||||||
May-19 |
87.22 |
77.68 |
86.25 |
55.01 |
49.42 |
52.50 |
|||||||
Apr-19 |
78.67 |
71.14 |
77.68 |
49.75 |
45.23 |
49.00 |
|||||||
Mar-19 |
75.88 |
70.51 |
74.59 |
47.98 |
45.72 |
46.10 |
|||||||
Feb-19 |
76.06 |
72.83 |
74.84 |
47.74 |
45.17 |
46.93 |
|||||||
Jan-19 |
74.37 |
65.38 |
73.31 |
46.53 |
40.07 |
46.00 |
|||||||
ANALYST COVERAGE
Institution |
Analyst name |
|
ACTINVER |
José Antonio Cebeira |
|
APALACHE ANALISIS |
Jorge Placido |
|
BBVA BANCOMER |
Pablo Abraham Peregrina |
|
GBM |
Miguel Tortolero |
|
INVEX |
Giselle Mojica |
|
JPMORGAN |
Ulises Argote |
|
MIRANDA-GR |
Martin Lara |
|
SANTANDER |
Luis Miranda |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $19.20 per USD $1.0, which corresponds to the rate at the close of June 30, 2019, according to Mexico's National Bank.
- Consolidated Statement of Financial Position
- Consolidated Statement of Income
- Consolidated Statement of Cash Flows
- Derivatives Position Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
|||
-Unaudited- |
|||
In U.S. Dollar |
June 30, |
December 31, |
|
In million pesos |
2019 |
2019 |
2018* |
TOTAL ASSETS |
$ 2,855.5 |
54,826.4 |
52,865.6 |
Total current assets |
1,584.7 |
30,426.4 |
29,775.0 |
Cash and cash equivalents |
966.3 |
18,553.1 |
18,458.5 |
Total accounts receivable |
255.7 |
4,909.9 |
3,486.5 |
Inventories |
321.2 |
6,166.1 |
6,649.1 |
Other current assets |
41.5 |
797.3 |
1,180.9 |
Total non current assets |
1,270.8 |
24,400.1 |
23,090.6 |
Net property, plant and equipment |
944.3 |
18,129.9 |
18,018.2 |
Other non current Assets |
326.6 |
6,270.1 |
5,072.4 |
TOTAL LIABILITIES |
$ 819.1 |
15,727.3 |
14,699.9 |
Total current liabilities |
478.2 |
9,181.4 |
9,084.9 |
Notes payable to banks |
179.2 |
3,440.2 |
3,492.8 |
Accounts payable |
185.1 |
3,554.1 |
4,228.4 |
Other taxes payable and other accruals |
113.9 |
2,187.1 |
1,363.7 |
Total long-term liabilities |
340.9 |
6,545.9 |
5,614.9 |
Long-term debt |
80.9 |
1,552.8 |
1,544.8 |
Other non current liabilities |
64.5 |
1,238.4 |
302.8 |
Deferred income taxes |
195.6 |
3,754.7 |
3,767.3 |
TOTAL STOCKHOLDERS' EQUITY |
$ 2,036.4 |
39,099.1 |
38,165.7 |
Capital stock |
61.2 |
1,174.4 |
1,174.3 |
Commission in shares issued |
21.6 |
414.5 |
414.5 |
Retained earnings |
1,896.3 |
36,408.4 |
35,354.5 |
Others accounts |
53.4 |
1,025.5 |
1,153.0 |
Non controlling interest |
4.0 |
76.3 |
69.5 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 2,855.5 |
54,826.4 |
52,865.6 |
*Audited |
|||
CONSOLIDATED STATEMENT OF INCOME |
|||
Second Quarter Results, ended June 30th: |
|||
-Unaudited- |
|||
U.S. Dollar |
|||
In millions pesos |
2019 |
2019 |
2018* |
Net sales |
$ 879.4 |
16,884.1 |
16,213.6 |
Cost of sales |
685.7 |
13,164.5 |
13,108.3 |
Gross profit |
193.7 |
3,719.6 |
3,105.3 |
SG&A |
80.8 |
1,550.8 |
1,489.1 |
Other income (expenses), net |
(0.3) |
(5.0) |
40.2 |
Operating income |
112.7 |
2,163.8 |
1,656.4 |
Net finance income |
4.8 |
91.6 |
562.1 |
Income tax |
34.6 |
663.4 |
641.8 |
Net Income |
$ 82.9 |
1,591.9 |
1,576.7 |
Non-controlling interest |
0.16 |
3.1 |
2.3 |
Net controlling interest profit |
82.8 |
1,588.8 |
1,574.3 |
Basic and diluted earnings per share |
0.14 |
2.65 |
2.62 |
Basic and diluted earnings per ADR |
1.66 |
31.78 |
31.49 |
Weighted average Shares outstanding1 |
600,000 |
600,000 |
600,000 |
EBITDA Result |
$ 129.3 |
2,483.3 |
1,976.0 |
Gross margin |
22.0% |
22.0% |
19.2% |
Operating margin |
12.8% |
12.8% |
10.2% |
Net margin |
9.4% |
9.4% |
9.7% |
EBITDA margin |
14.7% |
14.7% |
12.2% |
1 In thousands |
|||
* Audited |
|||
CONSOLIDATED STATEMENT OF INCOME |
|||
Accumulated results, for the six months ended June 30. |
|||
-Unaudited- |
|||
U.S. Dollar |
|||
In millions pesos |
2019 |
2019 |
2018* |
Net sales |
$ 1,625.4 |
31,207.7 |
31,516.6 |
Cost of sales |
1,337.5 |
25,680.2 |
25,194.1 |
Gross profit |
287.9 |
5,527.5 |
6,322.5 |
Selling, general and administrative expenses |
157.6 |
3,025.2 |
2,874.6 |
Other income (expenses), net |
(0.2) |
(3.4) |
31.0 |
Operating income |
130.2 |
2,498.9 |
3,478.9 |
Net finance income |
8.7 |
167.6 |
468.4 |
Income tax |
40.2 |
772.1 |
1,109.6 |
Net income |
$ 98.7 |
1,894.4 |
2,837.6 |
Non-controlling interest |
0.4 |
6.8 |
7.6 |
Net controlling interest profit |
98.3 |
1,887.6 |
2,830.0 |
Basic and diluted earnings per share |
0.16 |
3.15 |
4.72 |
Basic and diluted earnings per ADR |
1.97 |
37.8 |
56.60 |
Weighted average Shares outstanding1 |
599,960 |
599,960 |
599,990 |
EBITDA Result |
$ 163.4 |
3,138.2 |
4,108.2 |
Gross margin |
17.7% |
17.7% |
20.1% |
Operating margin |
8.0% |
8.0% |
11.0% |
Net margin |
6.0% |
6.1% |
9.0% |
EBITDA margin |
10.1% |
10.1% |
13.0% |
1 In thousands |
|||
* Audited |
|||
CONSOLIDATED STATEMENT OF CASH FLOWS |
||||
In million of pesos |
||||
-Unaudited- |
||||
U.S. Dollar |
June 30, |
|||
2019 |
2019 |
2018* |
||
NET MAJORITY INCOME BEFORE INCOME TAX |
$ 138.9 |
2,666.5 |
3,947.2 |
|
ITEMS RELATING TO INVESTING ACTIVITIES: |
14.0 |
269.4 |
229.3 |
|
Depreciation and others |
33.3 |
639.3 |
600.7 |
|
Income (loss) on sale of plant and equipment |
(1.2) |
(23.1) |
6.9 |
|
Other Items |
(18.1) |
(346.7) |
(378.4) |
|
NET CASH GENERATED FROM NET INCOME BEFORE TAXES |
152.9 |
2,935.9 |
4,176.5 |
|
CASH GENERATED OR USED IN THE OPERATION: |
(103.0) |
(1,977.9) |
(1,562.8) |
|
Decrease (increase) in accounts receivable |
(74.3) |
(1,426.1) |
416.6 |
|
Decrease (increase) in inventories |
20.6 |
395.7 |
(516.2) |
|
Increase (decrease) in accounts payable |
(102.2) |
(1,961.8) |
(226.5) |
|
Other Items |
52.8 |
1,014.3 |
(1,236.7) |
|
NET CASH FLOW FROM OPERATING ACTIVITIES |
49.9 |
958.0 |
2,613.7 |
|
NET CASH FLOW FROM INVESTING ACTIVITIES |
(9.8) |
(188.6) |
(130.1) |
|
Acquisition of property, plant and equipment |
(42.9) |
(824.6) |
(780.5) |
|
Proceeds from sales of property plant and equipment |
1.9 |
37.3 |
11.4 |
|
Other Items |
31.2 |
598.7 |
639.0 |
|
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES |
40.1 |
769.4 |
2,483.6 |
|
Net cash provided by financing activities: |
(36.8) |
(706.5) |
(774.6) |
|
Proceeds from loans |
181.2 |
3,478.6 |
3,177.5 |
|
Principal payments on loans |
(178.3) |
(3,424.2) |
(3,455.1) |
|
Dividends paid |
(21.9) |
(420.0) |
(426.0) |
|
Other items |
(17.8) |
(340.9) |
(70.9) |
|
Net increase (decrease) in cash and equivalents |
3.3 |
62.9 |
1,709.0 |
|
Cash and investments at the beginning of year |
$ 961.0 |
18,451.9 |
17,240.1 |
|
CASH AND INVESTMENTS AT END OF PERIOD |
$ 964.3 |
18,514.8 |
18,949.1 |
|
*Audited |
||||
DERIVATIVES POSITION REPORT
Second Quarter 2019 |
|||||||||||||
Thousands of Mexican Pesos, as of June 30, 2019 |
|||||||||||||
TYPE OF FINANCIAL INSTRUMENT |
OBJECTIVE |
NOTIONAL |
VALUE OF THE RELATED COMMODITY |
REASONABLE VALUE |
AMOUNTS DUE BY YEAR |
GUARANTIES REQUIRED |
|||||||
2Q-2019 |
1Q-2019 |
2Q-2019 |
1Q-2019 |
||||||||||
Forward Vanilla |
Hedge |
$ 39,161 |
$ 19.20 |
$ 19.41 |
$ -11,503 |
$ -4,655 |
90% in 2019 and 10% in 2020 |
The deals consider the possibility of margin calls but not another kind of guarantee |
|||||
Futures for corn and soybean meal |
Hedge |
$ 192,042 |
CORN |
CORN |
$ 5,654 |
-$ 2,474 |
60% in 2019; 40% in 2020 |
||||||
In USD per Bushel |
In USD per Bushel |
||||||||||||
month |
price |
month |
price |
||||||||||
Mar-20 |
$ 4.395 |
||||||||||||
May-19 |
$ 3.565 |
||||||||||||
Jul-19 |
$ 3.663 |
||||||||||||
Sep-19 |
$ 4.248 |
Sep-19 |
$ 3.750 |
||||||||||
Dec-19 |
$ 4.315 |
Dec-19 |
$ 3.848 |
||||||||||
SOYBEAN MEAL |
SOYBEAN MEAL |
||||||||||||
In USD per ton |
In USD per ton |
||||||||||||
month |
price |
month |
price |
||||||||||
May-19 |
$ 306.5 |
||||||||||||
Jul-19 |
$ 310.0 |
||||||||||||
Aug-19 |
$ 315.3 |
Aug-19 |
$ 311.5 |
||||||||||
Jan-20 |
$ 324.8 |
Sep-19 |
$ 313.0 |
||||||||||
Mar-20 |
$ 327.0 |
||||||||||||
May-20 |
$ 329.0 |
||||||||||||
Jul-20 |
$ 331.0 |
||||||||||||
Aug-20 |
$ 331.4 |
||||||||||||
Sep-20 |
$ 331.6 |
||||||||||||
Options of Corn |
Hedge |
$ 93,363 |
CORN |
CORN |
$ 11,339 |
-$ 2,846 |
90% in 2019; 10% in 2020 |
||||||
In USD per Bushel |
In USD per Bushel |
||||||||||||
month |
price |
month |
price |
||||||||||
May-19 |
$ 3.565 |
||||||||||||
Jul-19 |
$ 3.752 |
Jul-19 |
$ 3.663 |
||||||||||
Sep-19 |
$ 4.248 |
Sep-19 |
$ 3.750 |
||||||||||
Dec-19 |
$ 4.315 |
Dec-19 |
$ 3.848 |
||||||||||
Jan-20 |
$ 4.395 |
Jan-20 |
$ 3.970 |
||||||||||
Options of soybean meal |
Hedge |
$ 118,336 |
SOYBEAN MEAL |
SOYBEAN MEAL |
$ 2,738 |
$ 97 |
80% in 2019; 20% in 2020 |
||||||
In USD per ton |
In USD per ton |
||||||||||||
month |
price |
month |
price |
||||||||||
May-19 |
$ 306.5 |
||||||||||||
Jul-19 |
$ 310.0 |
||||||||||||
Aug-19 |
$ 315.3 |
Aug-19 |
$ 311.5 |
||||||||||
Sep-19 |
$ 313.0 |
Sep-19 |
$ 313.0 |
||||||||||
Oct-19 |
$ 325.9 |
Oct-19 |
$ 314.1 |
||||||||||
Dec-19 |
$ 316.8 |
Dec-19 |
$ 316.8 |
||||||||||
Jan-20 |
$ 324.8 |
Jan-20 |
$ 317.7 |
||||||||||
Mar-20 |
$ 327.0 |
Mar-20 |
$ 317.8 |
||||||||||
-The total financial instruments do not exceed 5% of total assets as of June 30, 2019. |
|||||||||||||
-The notional value represents the net position as of June 30, 2019 at the exchange rate of Ps. 19.20 per one dollar. |
|||||||||||||
-A negative value means an unfavorable effect for the Company. |
|||||||||||||
PROBABLE SCENARIO
Second Quarter 2019 |
|||||||||
Thousands of Mexican Pesos, as of June 30, 2019 |
PROBABLE SCENARIO |
||||||||
TYPE OF FINANCIAL INSTRUMENT |
REASONABLE VALUE |
VALUE OF THE RELATED COMMODITY |
EFFECT ON THE INCOME STATEMENT |
EFFECT ON THE CASH FLOW(3) |
|||||
Reference Value (1) |
|||||||||
-2.5% |
2.5% |
5.0% |
-2.5% |
2.5% |
5.0% |
||||
Forward Vanilla |
-$ 11,503 |
$18.72 |
$ 19.68 |
$ 20.16 |
Direct |
-$ 30,300 |
$ 7,294 |
$ 26,091 |
|
-5% |
5% |
10% |
-5% |
5% |
10% |
||||
Futures of Corn: (2) |
$ 5,654 |
$ 4.035 |
$ 4.460 |
$ 4.672 |
The effect will materialize as the inventory is consumed |
-$ 3,948 |
$ 15,256 |
$ 24,858 |
|
Futures of Soybean Meal: (2) |
$ 299.5 |
$ 331.1 |
$ 346.8 |
||||||
Options for Corn |
$ 11,339 |
$ 4.035 |
$ 4.460 |
$ 4.672 |
$ 3,518 |
$ 17,086 |
$ 22,821 |
||
Options of Soybean Meal |
$ 2,738 |
$ 299.5 |
$ 331.1 |
$ 346.8 |
-$ 3,179 |
$ 8,655 |
$ 14,572 |
||
(1) The reference value is the exchange rate of Ps. $19.20 per USD as of June 30, 2019. |
|||||||||
(2) The reference values are; the future of corn for Sep 2019, $4.2475 USD/bushel and the future of soybeanmeal for Ago 2019, $315.3 USD/ton. |
|||||||||
'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. |
|||||||||
(3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. |
|||||||||
-A negative value means an unfavorable effect for the Company. |
|||||||||
Second Quarter 2019 |
|||||||||||
Thousands of Mexican Pesos, as of June 30, 2019 |
STRESS SCENARIO |
||||||||||
TYPE OF FINANCIAL INSTRUMENT |
REASONABLE VALUE |
VALUE OF THE RELATED COMMODITY |
EFFECT ON THE INCOME STATEMENT |
EFFECT ON THE CASH FLOW |
|||||||
Reference Value |
|||||||||||
-50% |
-25% |
25% |
50% |
-50% |
-25% |
25% |
50% |
||||
Forward Vanilla |
-$ 11,503 |
$9.60 |
$14.40 |
$24.00 |
$28.80 |
Direct |
-$387,444 |
-$199,474 |
$176,467 |
$364,438 |
|
CONFERENCE CALL INFORMATION
The Company will host its second quarter 2019 earnings call, on Tuesday, July 23rd, 2019. The earnings call will take place at 9:00 am Central Time (10:00 am ET).
Toll free in the U.S.: 1 (888) 771-4371
Toll free in Mexico: 001 866 779 0965
A current list of available local and international free phone telephone numbers: http://web.meetme.net/r.aspx?p=12&a=UoVIOmhiRjawMt
Confirmation Number: 48818445
COMPANY DESCRIPTION
Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 64 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 27,000 people.
The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V.
DISCLAIMER
The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management's current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement.
IR contact information:
[email protected]
[email protected]
T. +52(461)618 3555
SOURCE Industrias Bachoco, S.A.B. de C.V.
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