Industrias Bachoco Announces Third Quarter 2012 Results
CELAYA, Mexico, Oct. 24, 2012 /PRNewswire/ -- Industrias Bachoco S.A.B. de C.V., "Bachoco" or "the Company", announced today its unaudited results for the third quarter 2012 ("3Q12") and first nine months ("9M12) ended September 30, 2012. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("Ps.").
HIGHLIGHTS (3Q12 vs. 3Q11)
- Net sales increased 52.0%.
- EBITDA margin reached 9.6%.
- Earnings per share totaled Ps. 1.05 (Ps. 12.55 per ADS), compared to a net loss per share of Ps. 0.18 (-Ps. 2.10 per ADS) in 3Q11.
CEO COMMENTS
"Bachoco's third quarter results were sound, due to an adequate balance between supply and demand in the Company's main business lines, improvements in production efficiencies as a result of investments in productivity projects, as well as a reduction in operating expenses as a percentage of sales, which allowed Bachoco to offset cost increases, which have been driven by sustained raw materials price increases.
The Company was able to sell all of its chicken and egg production, and recovered a portion of price lags within these business lines.
In addition, Bachoco's U.S. complex continued to operate with positive results, with its integration into the Company in-line with Bachoco's overall strategy.
Furthermore, the Company successfully issued its first local bond during the third quarter, which will be mainly used to pre-pay some debt as well as to diversify and make the Company's debt structure more efficient. It is worth nothing that the Company's financial position remains strong, with negative debt net."
BOND ISSUANCE
On August 29, 2012, the Company announced a public issuance of local bonds ("Certificados Bursatiles") totaling Ps. 1,500 million, for a tenor of 5 years, maturing in 2017. The bonds issued by Bachoco will have an interest rate of 28-day TIIE + 0.60%.
EXECUTIVE SUMMARY
The following financial information is expressed in millions of nominal Mexican Pesos, with comparative figures for the same periods in 2011.
| QUARTERLY |
ACCUMULATED |
||||||||||
| In millions of pesos |
3Q11 |
3Q12 |
Var. |
2011 |
2012 |
Var. |
|||||
| Net sales |
Ps. |
6,514.7 |
Ps. |
9,901.0 |
52.0% |
Ps. |
19,173.8 |
Ps. |
28,642.7 |
49.4% |
|
| Net sales Mexico |
6,514.7 |
7,758.4 |
19.1% |
19,173.8 |
22,721.6 |
18.5% |
|||||
| Net sales in the U.S. |
0.0 |
2,142.6 |
100.0% |
0.0 |
5,921.1 |
100.0% |
|||||
| Cost of sales |
5,955.1 |
8,342.6 |
40.1% |
16,882.1 |
24,222.7 |
43.5% |
|||||
| Gross profit |
559.6 |
1,558.4 |
178.5% |
2,291.7 |
4,420.0 |
92.9% |
|||||
| Total expenses |
708.0 |
839.9 |
18.6% |
2,100.8 |
2,498.5 |
18.9% |
|||||
| EBITDA1 |
28.7 |
955.0 |
3231.0% |
724.4 |
2,651.7 |
266.1% |
|||||
| Net majority income (loss) |
(105.6) |
627.5 |
N/A |
190.2 |
1,604.9 |
743.7% |
|||||
1Operating income plus depreciation and amortization.
The Company's 3Q12 net sales totaled Ps. 9,901.0 million, 52.0% higher than the Ps. 6,514.7 million reported in 3Q11. This resulted from strong increases in sales across all business lines. In particular, chicken sales increased year-over-year mainly as a result of the integration of Bachoco's U.S. subsidiary "OK Foods", which was consolidated in November 2011.
The Company's production costs continued to be negatively impacted by persistently high input costs, primarily grain and soybean meal.
Gross profit in 3Q12 was Ps. 1,558.4 million resulting in a gross margin of 15.7 % compared to a gross profit of Ps. 559.6 million with a margin of 8.6% in 3Q11. Meanwhile, gross margin totaled 15.4% in 9M12, compared to 12.0% in the same period 2011.
In 3Q12, total expenses represented 8.5% over total sales, compared to 10.9% over total sales in 3Q11. This was as a result of strict expense control across all of Bachoco's operations.
EBITDA in 3Q12 reached Ps. 955.0 million, for a margin of 9.6%, compared to EBITDA of Ps. 28.7 million, for a margin of 0.4% in 3Q11. EBITDA margin in 9M12 was 9.3%, compared to 3.8% reported in the same period 2011.
The comprehensive financial result was income of Ps. 19.9 million in 3Q12, and Ps. 113.3 million in the first nine months 2012. This was mainly due to interest earned on the Company's cash position.
| QUARTERLY |
ACCUMULATED |
|||||||||
| In million of pesos |
3Q11 |
3Q12 |
Var. |
2011 |
2012 |
Var. |
||||
| Financial income (expense) net |
Ps. |
74.6 |
Ps. |
19.9 |
-73.3% |
Ps. |
137.8 |
Ps. |
113.0 |
-18.0% |
| Financial income |
94.3 |
64.5 |
-31.6% |
192.3 |
207.3 |
7.8% |
||||
| Financial expense |
19.7 |
44.6 |
126.4% |
54.5 |
94.3 |
73.0% |
||||
Total taxes in 3Q12 reached Ps. 172.4 million; resulting from Ps. 117.0 million in income taxes and Ps. 55.3 million in deferred income taxes.
Net majority income was Ps. 627.5 million in 3Q12 (Ps. 1.05 per share), compared to a net majority loss of Ps. 105.6 (-Ps. 0.18 per share) reported in 3Q11. Meanwhile, net majority income in the first nine months 2012 was Ps. 1,604.9 million (Ps. 2.67 per share), compared to net majority income of Ps. 190.2 million (Ps. 0.32 per share) reported in the same period 2011.
BALANCE SHEET
Cash and equivalents as of September 30, 2012 totaled Ps. 4,526.0 million compared to Ps. 3,036.4 million reported as of December 31, 2011. Total cash increased during the quarter mainly due to the income from the bond issuance as well as cash generated by the Company.
As of September 30, 2012, total debt was Ps. 2,717.4 million pesos, compared to Ps. 1,837.4 million reported as of December 31, 2011. The Company's debt is broken down as follows:
| In millions of pesos |
As of Dec 31, 2011 |
As of Sep 30, 2012 |
Var. |
||
| Short term debt |
Ps. |
1,453.0 |
Ps. |
1,141.7 |
-21.9% |
| Long term debt |
384.4 |
1,575.7 |
309.9% |
||
| Total debt |
1,837.4 |
2,717.4 |
47.9% |
||
| Net debt2 |
-1,199.0 |
-1,808.6 |
50.8% |
||
2 Net debts equal to: total debt minus total cash and equivalents.
CAPITAL EXPENDITURES
Total CAPEX as of September 30, 2012 totaled Ps. 664.6 million, mainly allocated towards productivity projects and maintenance.
STOCK INFORMATION
| As of September 30, 2012 |
|||
| Total Shares |
600,000,000 |
||
| Total free float |
17.25% |
||
| Total shares in treasury (as of September 30, 2012) |
67,441 |
||
| Total shares in treasury (as of October 24, 2012) |
299,761 |
||
| Market cap (millions) |
Ps. |
15,546 |
|
| BMV |
NYSE |
||
| Ticker Symbol |
Bachoco |
IBA |
|
| Closing price as of September 30, 2012 |
Ps. |
25.91 |
$24.06 |
| Maximums closing price within the 52 weeks |
Ps. |
26.35 |
$ 24.06 |
| Minimums closing price within the last 52 weeks |
Ps. |
20.30 |
$ 17.40 |
| Pricing yield in 2012 |
16.2% |
26.2% |
|
ANALYST COVERAGE
| INSTITUTION |
ANALYST |
CONTACT INFO |
| GBM- Grupo Bursatil Mexicano, Casa de Bolsa |
Miguel Mayorga Tena |
|
| BBVA Research – Food & Beverage Analyst |
Fernando Olvera Espinosa de los Monteros |
|
| Actinver, Casa de Bolsa |
Eduardo Fonseca Fons |
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 productive complexes and 64 distribution centers in Mexico, and a productive complex in the United States. Currently the Company employs more than 25,000 people. In 2011, the Company reported net sales of Ps. 27.7 billion.
The Company is rated AA (MEX), representing high credit quality by Fitch Mexico, S.A. de C.V., and HR AA+ which signals that the Company and the offering both have high 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.
APPENDICES TO FOLLOW
For reference, some figures have been translated in millions of U.S. dollars ("USD") using an exchange rate of $12.86, that correspond to the close of September 30, 2012, according to Mexico's National Bank.
- Consolidated Statement of Financial Position
- Consolidated Statement of Income
- Consolidated Statement of Cash Flows
- Derivatives Position Report
1. Consolidated Statement of Financial Position
| -Unaudited- |
U.S. Dollar |
||
| As of Dec 31, |
As of Sept 30, |
As of Sept 30, |
|
| In million of pesos |
2011 |
2012 |
2012 (1) |
| ASSETS |
|||
| Cash and cash equivalents |
$ 3,036 |
$ 4,526 |
$ 352 |
| Total accounts receivable |
2,333 |
2,129 |
166 |
| Inventories |
5,809 |
6,728 |
523 |
| Other current assets |
712 |
284 |
22 |
| Total current assets |
11,890 |
13,666 |
1,063 |
| Net property, plant and equipment |
11,755 |
11,557 |
899 |
| Other non current assets |
840 |
1,285 |
100 |
| TOTAL ASSETS |
$ 24,484 |
$ 26,508 |
$ 2,061 |
| LIABILITIES |
|||
| Notes payable to banks |
1,453.0 |
1,141.7 |
89 |
| Accounts payable |
2,422 |
2,260 |
176 |
| Other taxes payable and other accruals |
606 |
722 |
56 |
| Total current liabilities |
4,481 |
4,123 |
321 |
| Long-term debt |
384.4 |
1,575.7 |
123 |
| Other non current liabilities |
58 |
62 |
5 |
| Deferred income taxes |
2,522 |
2,577 |
200 |
| Total long-term liabilities |
2,965 |
4,215 |
328 |
| TOTAL LIABILITIES |
$ 7,446 |
$ 8,338 |
$ 648 |
| STOCKHOLDERS' EQUITY |
|||
| Capital stock |
1,393 |
1,393 |
108 |
| Commission in shares issued |
459 |
459 |
36 |
| Repurchased shares |
93 |
102 |
8 |
| Retained earnings |
13,975 |
15,279 |
1,188 |
| Others accounts |
1,059 |
873 |
68 |
| Total majority stockholder's equity |
16,978 |
18,105 |
1,408 |
| Minority interest |
60 |
64 |
5 |
| TOTAL STOCKHOLDERS' EQUITY |
$ 17,038 |
$ 18,170 |
$ 1,413 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 24,484 |
$ 26,508 |
$ 2,061 |
2. Consolidated Statement of Income
| -Unaudited- |
|||||||||
| Third Quarter |
U.S. Dollar (1) |
Accumulated |
U.S. Dollar (1) |
||||||
| In million of pesos as of September 30: |
2011 |
2012 |
Var. |
2012 |
2011 |
2012 |
Var. |
2012 |
|
| Net sales |
$ 6,515 |
$ 9,901 |
52.0% |
$ 770 |
$ 19,174 |
$ 28,643 |
49.4% |
$ 2,227 |
|
| Cost of sales |
5,955 |
8,343 |
40.1% |
649 |
16,882 |
24,223 |
43.5% |
1,884 |
|
| Gross profit |
560 |
1,558 |
178.5% |
121 |
2,292 |
4,420 |
92.9% |
344 |
|
| total expenses |
708 |
840 |
18.6% |
65 |
2,101 |
2,498 |
18.9% |
194 |
|
| Operating income |
(148) |
719 |
-584.2% |
56 |
191 |
1,922 |
906.4% |
149 |
|
| EBITDA Result |
29 |
955 |
3231.0% |
74 |
724 |
2,652 |
266.1% |
206 |
|
| Other income (expense) net |
(64) |
64 |
-199.4% |
5 |
(92) |
17 |
-118.9% |
1 |
|
| Comprehensive financing (cost) income |
75 |
20 |
-73.3% |
2 |
138 |
113 |
-18.0% |
||
| Minority net income |
0 |
(2) |
-734.2% |
(0) |
(1) |
(4) |
322.2% |
(0) |
|
| Income before income tax, asset tax |
(138) |
800 |
-681.6% |
62 |
236 |
2,048 |
768.1% |
150 |
|
| Total income taxes |
(32) |
172 |
-634.0% |
13 |
46 |
443 |
869.6% |
9 |
|
| Net majority income |
(105) |
628 |
-696.2% |
49 |
190 |
1,605 |
743.7% |
142 |
|
| Net income |
(106) |
628 |
-694.3% |
49 |
190 |
1,605 |
743.7% |
142 |
|
| Net income per share (EPS) |
(0.18) |
1.05 |
-696.2% |
0.08 |
0.32 |
2.67 |
0.0% |
0.24 |
|
| weighted average shares outstanding |
600 |
600 |
0.0% |
600 |
600 |
600 |
0.0% |
600 |
|
| Gross margin |
8.6% |
15.7% |
15.7% |
12.0% |
15.4% |
15.4% |
|||
| Operating margin |
-2.3% |
7.3% |
7.3% |
1.0% |
6.7% |
6.7% |
|||
| EBITDA margin |
0.4% |
9.6% |
9.6% |
3.8% |
9.3% |
9.3% |
|||
| Net margin |
-1.6% |
6.3% |
6.3% |
1.0% |
5.6% |
5.6% |
|||
3. Consolidated Statement of Cash Flow
| -Unaudited- |
|||
| U.S. Dollar |
|||
| As of Sept 30, |
As of Sept 30, |
As of Sept 30, |
|
| In million of pesos |
2011 |
2012 |
2012 (1) |
| NET MAJORITY INCOME BEFORE INCOME TAX |
236 |
2,048 |
159 |
| ITEMS THAT DO NOT REQUIRE CASH: |
- |
- |
- |
| ITEMS RELATING TO INVESTING ACTIVITIES: |
571 |
651 |
51 |
| Depreciation and others |
533 |
730 |
57 |
| Income (loss) on sale of plant and equipment |
37 |
63 |
5 |
| Other Items |
- |
(142) |
(11) |
| ITEMS RELATING TO FINANCING ACTIVITIES: |
38 |
55 |
4 |
| Interest income (expense) |
38 |
55 |
4 |
| Other Items |
- |
- |
- |
| NET CASH GENERATED FROM NET INCOME BEFORE TAXES |
845 |
2,754 |
214 |
| CASH GENERATED OR USED IN THE OPERATION: |
(845) |
(1,454) |
(113) |
| Decrease (increase) in accounts receivable |
141 |
22 |
2 |
| Decrease (increase) in inventories |
(974) |
(1,234) |
(96) |
| Decrease (increase) in accounts payable |
4 |
(152) |
(12) |
| Decrease (increase) in other liabilities |
(16) |
(91) |
(7) |
| NET CASH FLOW FROM OPERATING ACTIVITIES |
(1) |
1,301 |
101 |
| INVESTING ACTIVITIES |
|||
| NET CASH FLOW FROM INVESTING ACTIVITIES |
(551) |
(342) |
(27) |
| Acquisition of property, plant and equipment |
(548) |
(665) |
(52) |
| Proceeds from sales of property plant and equipment |
75 |
20 |
2 |
| Other Items |
(79) |
304 |
24 |
| CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN |
|||
| FINANCING ACTIVITIES |
(552) |
959 |
75 |
| Net cash provided by financing activities: |
(367) |
531 |
41 |
| Proceeds from loans |
895 |
2,354 |
183 |
| Principal payments on loans |
(715) |
(1,485) |
(115) |
| Dividends paid |
(300) |
(300) |
(23) |
| Other items |
(247) |
(39) |
(3) |
| NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS |
(911) |
1,490 |
116 |
| CASH AND INVESTMENTS AT THE BEGINNING OF YEAR |
4,177 |
3,036 |
236 |
| CASH AND INVESTMENTS AT END OF PERIOD |
3,266 |
4,526 |
352 |
4. Derivatives Position Report
| Third Quarter 2012 |
||||||||||||||||
| Thousands of Mexican Pesos, as of September 30, 2012 |
||||||||||||||||
| Type of Financial |
Objective |
Reasonable Value |
Amounts Due |
|||||||||||||
| Notional |
Value of the Related Commodity |
Guaranties Required |
||||||||||||||
| 3Q-2012 |
2Q-2012 |
3Q-2012 |
2Q-2012 |
|||||||||||||
| Forwards and knock |
Hedge and negotiation |
$315,154 |
$12.86 |
$13.34 |
$ 2,458 |
-$10,238 |
2012 |
The deals consider the possibility of margin calls but not another kind of guarantee |
||||||||
| Futures for corn and Soybean meal |
Hedge |
$111,824 |
Month |
Price |
Month |
Price |
$15,892 |
$ 23,548 |
2012 and 2013 |
|||||||
| Corn |
Corn |
|||||||||||||||
| in USD per bushel |
in USD per bushel |
|||||||||||||||
| DEC-2012 |
$7.5625 |
JUL-2012 |
$6.7250 |
|||||||||||||
| MAR-2013 |
$7.5950 |
SEP-2012 |
$6.2850 |
|||||||||||||
| MAY-2013 |
$7.5650 |
DEC-2012 |
$6.3475 |
|||||||||||||
| JUL-2013 |
$7.4900 |
MAR-2013 |
$6.4375 |
|||||||||||||
| SEP-2013 |
$6.5900 |
MAY-2013 |
$6.4775 |
|||||||||||||
| JUL-2013 |
$6.5175 |
|||||||||||||||
| Soybean Meal |
Soybean Meal |
|||||||||||||||
| In USD per ton |
In USD per ton |
|||||||||||||||
| DEC-2012 |
$486.90 |
AUG-2012 |
$429.50 |
|||||||||||||
| JAN-2013 |
$483.90 |
SEP-2012 |
$424.00 |
|||||||||||||
| MAR-2013 |
$468.40 |
OCT-2012 |
$416.30 |
|||||||||||||
| MAY-2013 |
$447.00 |
DEC-2012 |
$413.10 |
|||||||||||||
| JUL-2013 |
$435.40 |
JAN-2013 |
$408.10 |
|||||||||||||
| MAR-2013 |
$387.70 |
|||||||||||||||
| MAY-2013 |
$373.90 |
|||||||||||||||
| JUL-2013 |
$371.80 |
|||||||||||||||
| SWAP, interest rate |
Hedge |
$330,939 |
TIIE to 28 |
4.8075% |
$ 490 |
$ - |
2012 y 2013 |
|||||||||
Notes:
- The total financial instruments do not exceed 5% of total assets as of September 30, 2012.
- A negative value means an unfavorable effect for the Company.
- The notional value represents the net position as of September 30, 2012 at the exchange rate of Ps.12.86 per USD.
| Third Quarter 2012 |
||||||||||||||||
| Thousands of Mexican Pesos, as of September 30, 2012 |
PROBABLE SCENARIO |
|||||||||||||||
| Type of Financial Instrument |
Reasonable Value |
Value of the Related Commodity |
Effect on the Income |
|||||||||||||
| as of September 30, |
Reference Value |
Effect on the Cash Flow(3) |
||||||||||||||
| 2012 |
-2.5% |
2.5% |
5.0% |
-2.5% |
2.5% |
5.0% |
||||||||||
| Forwards and knock out forwards(1) |
$ 2,458 |
$12.54 |
$13.18 |
$13.50 |
Direct |
-$5,421 |
$4,372 |
$3,918 |
||||||||
| -5% |
5% |
10% |
-5% |
5% |
10% |
|||||||||||
| Futures of corn: (2) |
$ 15,892 |
$7.1844 |
$7.9406 |
$8.3188 |
The effect will materialize as the inventory is consumed |
$12,205 |
$19,579 |
$ 23,266 |
||||||||
| Futures of soybean meal: (2) |
$462.56 |
$511.25 |
$535.59 |
|||||||||||||
| Options for corn and soybean meal (2) |
$ - |
|||||||||||||||
| -2% |
-1% |
1% |
-2% |
-1% |
1% |
|||||||||||
| SWAP interest rate(4) |
$ 490 |
2.8075% |
3.8075% |
5.8075% |
Direct |
-$ 3,173 |
-$ 1,341 |
$ 2,321 |
||||||||
| Third Quarter 2012 |
||||||||||
| Thousands of Mexican Pesos, as of September 30, 2012 |
PROBABLE SCENARIO |
|||||||||
| Reasonable Value |
Value of the Related Commodity |
Effect on the Income Statement |
Effect on the Cash Flow(3) |
|||||||
| Type of Instrument |
as of September 30, |
Reference Value |
||||||||
| 2012 |
-50% |
-25% |
25% |
50% |
-50% |
-25% |
25% |
50% |
||
| Forwards and knock out forwards(1) |
$ 2,458 |
$6.43 |
$9.65 |
$16.08 |
$19.29 |
Direct |
-$155,119 |
-$76,330 |
$19,079 |
$ 38,369 |
Notes:
- A negative value means an unfavorable effect for the Company.
- Corn and soybean meal are presented in U.S. dollars per bushel in the case of corn and per short-tones in the case of soybean meal.
- Even when table set above shows corn and soybean prices for contracts of December 2012, the effect on the Company's cash flow corresponds to the total positions effects.
(1) The reference value is the exchange rate of Ps. $12.86 per USD, as of September 30, 2012.
(2) The reference value is the Futures of corn for December 2012, is $7.5625 USD/bushel and Soybean meal for December 2012, $486.90 USD/ton.
(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.
(4) The reference value is the 28 days TIIE rate of 4.8075%, as of September 30, 2012.
SOURCE Industrias Bachoco S.A.B. de C.V.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article