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23.07.2018 23:00:00
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Industrias Bachoco Announces Second Quarter 2018 Results
CELAYA, Mexico, July 23, 2018 /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 ("2Q18") and first half ("1H18") 2018 ended on June 30, 2018. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS 2018
- Net sales increased 7.3% in 2Q18 and 9.4% in 1H18
- EBITDA margin was 12.2% for 2Q18 and 13.0% in 1H18
- Earnings per basic and diluted share totaled $2.62 for 2Q18 and $4.72 for 1H18
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This second quarter was challenging in both our Mexico and U.S. operations.
"In Mexico, cost of raw materials increased, in part due to a weaker Mexican peso, offsetting the increases in prices leading to pressure in margins.
"In the U.S. we observed atypical lower prices in the white meat market which combined with higher cost of raw materials, resulted in a difficult comparison vs 2Q17.
"Overall, the good balance between supply and demand allowed us to observe a net increase in price of our main products and to increase total sales by 7.3% in the quarter and 9.4% in the semester, compared to the same periods of 2017.
"Our EBITDA margin for the quarter was 12.2% which is lower than the EBITDA of the second quarter of 2017. As a result, our EBITDA for the first half of the year was 13.0%, compared to 13.2% EBITDA margin of the same period of 2017.
"Regarding 1H18, our results improved in general as we increase our EBITDA by 8.3% and our net income by 19.4%.
"We are entering the 3Q and we are observing prices in Mexico trending down as it is typical for a 3Q, however raw material cost is going down and the exchange rate on the Mexican peso vs the US dollar has strengthened. At the same time, we keep working to capture efficiencies across our processes in order to be the best option for our customers."
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 2017.
QUARTERLY RESULTS | ||||||
NET SALES BY GEOGRAPHY | ||||||
In millions of pesos | 2Q18 | 2Q17 | Change | |||
$ | $ | $ | % | |||
Net Sales | 16,213.6 | 15,116.3 | 1,097.4 | 7.3 | ||
Net sales in Mexico | 11,553.9 | 11,386.6 | 167.3 | 1.5 | ||
Net sales in the U.S. | 4,659.7 | 3,729.7 | 930.1 | 24.9 | ||
NET SALES BY SEGMENT | ||||||
In millions of pesos | 2Q18 | 2Q17 | Change | |||
$ | $ | $ | % | |||
Net Sales | 16,213.6 | 15,116.3 | 1,097.4 | 7.3 | ||
Poultry | 14,731.9 | 13,662.8 | 1,069.2 | 7.8 | ||
Other | 1,481.7 | 1,453.5 | 28.2 | 1.9 | ||
NET VOLUME SOLD BY SEGMENT | ||||||
In tons | Change | |||||
2Q18 | 2Q17 | Volume | % | |||
Total sales volume: | 551,287 | 545,600 | 5,687 | 1.04 | ||
Poultry | 431,315 | 420,604 | 10,711 | 2.55 | ||
Others | 119,972 | 124,996 | -5,024 | -4.02 | ||
The Company's 2Q18 net sales totaled $16,213.6 million, $1,097.4 million or 7.3% more than $15,116.3 million reported in 2Q17. The increase is a result of better prices in poultry and balanced feed.
In 2Q18, sales of our U.S. operations represented 28.7% of our total sales compared to 24.7% in 2Q17.
GROSS PROFIT | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Cost of sales | 13,108.3 | 11,502.1 | 1,606.2 | 14.0 | |
Gross profit | 3,105.3 | 3,614.2 | (508.9) | (14.1) | |
Gross margin | 19.2% | 23.9% | - | - | |
In 2Q18, cost of sales was $13,108.3 million; $1,606.2 million or 14.0% higher than $11,502.1 million reported in 2Q17. This increase was due higher raw material costs in dollar terms and a depreciation of the Mexican peso versus the US dollar.
The Company´s gross profit in 2Q18 was $3,105.3 million, 14.1% lower than the gross profit of $3,614.2 million in 2Q17, with a gross margin of 19.2% for 2Q18 vs 23.9% in 2Q17.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Total SG&A | 1,489.1 | 1,297.6 | 191.5 | 14.8 | |
Total SG&A expenses in 2Q18 were $1,489.1 million; $191.5 million higher than the $1,297.6 million reported in 2Q17. Total SG&A expenses as a percentage of net sales represented 9.2% in 2Q18 and 8.6% in 2Q17.
OTHER INCOME (EXPENSE), NET | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Other income (expense), net | 40.2 | 13.4 | 26.8 | 199.3 | |
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 2Q18, we recorded other income of $40.2 million, compared with other income of $13.4 million reported in 2Q17.
OPERATING INCOME | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Operating income | 1,656.4 | 2,330.0 | (673.6) | (28.9) | |
Operating margin | 10.2% | 15.4% | - | - | |
Operating income in 2Q18 totaled $1,656.4 million; $673.6 lower than $2,330.0 million reported in 2Q17. This represents an operating margin of 10.2% for 2Q18, lower when compared to the same period of 2017. The decrease in operating income is mainly attributed to higher cost of sales in 2Q18.
NET FINANCIAL INCOME | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Net Financial Income | 562.1 | 96.8 | 465.3 | 480.8 | |
Financial Income | 312.8 | 254.3 | 58.5 | 23.0 | |
Financial Expense | (249.3) | 157.5 | (406.9) | (258.3) | |
In 2Q18, the Company reported net financial income of $562.1 million, compared to $96.8 million reported in the same period of 2017. The increase is mainly attributed to higher exchange rate gains, as the peso depreciated during the quarter and higher interest rate earned.
TAXES FOR THE PERIOD | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Total Taxes | 641.8 | 703.9 | (62.1) | (8.8) | |
Income tax | 563.2 | 546.1 | 17.1 | 3.1 | |
Deferred income tax | 78.7 | 157.8 | (79.2) | (50.2) | |
Total taxes for the 2Q18 were $641.8 million, compared with total taxes of $703.9 million in the same period of 2017.
NET INCOME | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Net income | 1,576.9 | 1,722.8 | (146.0) | (8.5) | |
Net margin | 9.7% | 11.4% | - | - | |
Basic and diluted earnings per share1 | 2.62 | 2.87 | (0.2) | n/a | |
Basic and diluted earnings per ADR2 | 31.49 | 34.43 | (2.9) | 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 2Q18 was $1,576.9 million, representing a basic and diluted income of $2.62 pesos per share, compared with a net income of $1,722.8 million, which represented $2.87 pesos of net income per share in 2Q17. This decrease is mainly attributed to lower operating results. Net margin in 2Q18 was 9.7% compared to 11.4% reported in 2Q17.
EBITDA | |||||
In millions of pesos | 2Q18 | 2Q17 | Change | ||
$ | $ | $ | % | ||
Net income | 1,574.3 | 1,721.4 | (147.0) | (8.5) | |
Income tax expense (benefit) | 641.8 | 703.9 | (62.1) | (8.8) | |
Result in associates | 2.3 | 1.5 | 0.9 | 60.5 | |
Net finance (income) expense | (562.1) | (96.8) | (465.3) | 480.8 | |
Depreciation and amortization | 319.6 | 266.8 | 52.8 | 19.8 | |
EBITDA | 1,976.0 | 2,596.8 | (620.8) | (23.9) | |
EBITDA Margin (%) | 12.2% | 17.2% | - | - | |
Net revenues | 16,213.6 | 15,116.3 | 1,097.4 | 7.3 | |
EBITDA in 2Q18 reached $1,976.0, representing an EBITDA margin of 12.2%, compared to an EBITDA of $2,596.8 million in 2Q17, with an EBITDA margin of 17.2%.
ACCUMULATED RESULTS | |||||
NET SALES BY GEOGRAPHY | |||||
In millions of pesos | 1H18 | 1H17 | Change | ||
$ | $ | $ | % | ||
Net Sales | 31,516.6 | 28,801.2 | 2,715.4 | 9.4 | |
Net sales in Mexico | 22,645.4 | 21,335.9 | 1,309.5 | 6.1 | |
Net sales in the U.S. | 8,871.2 | 7,465.3 | 1,405.9 | 18.8 | |
NET SALES BY SEGMENT | |||||
In millions of pesos | 1H18 | 1H17 | Change | ||
$ | $ | $ | % | ||
Net Sales | 31,516.6 | 28,801.2 | 2,715.4 | 9.4 | |
Poultry | 28,490.6 | 25,949.4 | 2,541.2 | 9.8 | |
Other | 3,026.0 | 2,851.8 | 174.2 | 6.1 | |
NET VOLUME SOLD BY SEGMENT | |||||
In metric tons | Change | ||||
1H18 | 1H17 | Volume | % | ||
Total sales volume: | 1,098,037 | 1,073,699 | 24,338 | 2.27 | |
Poultry | 853,496 | 839,823 | 13,673 | 1.63 | |
Others | 244,541 | 233,876 | 10,665 | 4.56 | |
During the first half of 2018, net sales totaled $31,516.6 million; $2,715.4 million or 9.4% more than $28,801.2 million reported in the same period of 2017. The increase in sales is mainly attributable to higher price in our main product lines when compared to the first half of 2017.
In 1H18, sales of our U.S. operations represented 28.1% of our total sales, compared with 25.9% in 1H17.
OPERATING RESULTS | |||||
In millions of pesos | 1H18 | 1H17 | Change | ||
$ | $ | $ | % | ||
Cost of Sales | 25,194.1 | 22,995.4 | 2,198.7 | 9.6 | |
Gross Profit | 6,322.5 | 5,805.8 | 516.7 | 8.9 | |
Total SG&A | 2,874.6 | 2,558.9 | 315.8 | 12.3 | |
Other Income (expense) | 31.0 | 12.9 | 18.1 | 140.1 | |
Operating Income | 3,478.9 | 3,259.8 | 219.0 | 6.7 | |
Net Financial Income | 468.4 | 27.0 | 441.3 | 1,632.0 | |
Income Tax | 1,109.6 | 911.2 | 198.5 | 21.8 | |
Net Income | 2,837.6 | 2,375.7 | 461.9 | 19.4 | |
In 1H18, the cost of sales totaled $25,194.1 million; $2,198.7 million or 9.6% higher than $22,995.4 million reported in 1H17. The increase in cost of sales is mainly attributed to higher volume sold and higher raw material costs when compared to the same period of 2017.
As a result, we reached a gross profit of $6,322.5 million and a gross margin of 20.1% in 1H18, when compare to $5,805.8 million of gross profit and a margin of 20.2% reached in the same period of 2017.
Total SG&A expenses in 1H18 were $2,874.6 million; $315.8 million or 12.3% more than the $2,558.9 million reported in 1H17. In 1H18 total SG&A expenses as a percentage of net sales represented 9.1% compare with 8.9% in 1H17.
In 1H18 we had other income of $31.0 million, compared with other income of $12.9 million reported in 1H17.
The operating income in 1H18 was $3,478.9 million, which represents an operating margin of 11.0%, an increase of 6.7% from an operating income of $3,259.8 million and an operating margin of 11.3% in 1H17.
The net financial income in 1H18 was $468.4 million, higher when compared to a net financial income of $27.0 million in 1H17; mainly attributed to exchange rate gains as the Mexican peso depreciated vs the US dollar during the semester.
Total taxes were $1,109.6 million as of June 30, 2018. These taxes include $879.1 million of income tax and $230.6 million of deferred income taxes. This figure compares to total taxes of $911.2 million in 1H17; the increase was due to higher income before taxes.
All the above resulted in a net income of $2,837.6 million or 9.0% of net margin in the 1H18, which represents $4.72 pesos of earnings per share; while in the 1H17 the net income totaled $2,375.7 million, 8.2% of net margin and $3.96 pesos of net income per share.
EBITDA | |||||
In millions of pesos | 1H18 | 1H17 | Change | ||
$ | $ | $ | % | ||
Net controlling interest profit | 2,830.0 | 2,373.5 | 456.5 | 19.2 | |
Income tax expense (benefit) | 1,109.6 | 911.2 | 198.5 | 21.8 | |
Result in associates | 7.6 | 2.2 | 5.4 | 246.7 | |
Net finance (income) expense | (468.4) | (27.0) | (441.3) | 1,632.0 | |
Depreciation and amortization | 629.3 | 535.3 | 94.1 | 17.6 | |
EBITDA | 4,108.2 | 3,795.1 | 313.1 | 8.3 | |
EBITDA Margin (%) | 13.0% | 13.2% | - | - | |
Net revenues | 31,516.6 | 28,801.2 | 2,715.4 | 9.4 | |
EBITDA in 1H18 reached $4,108.2 million, representing an EBITDA margin of 13.0%, compared to EBITDA of $3,795.1 million in 1H17, with an EBITDA margin of 13.2%.
BALANCE SHEET | |||||
BALANCE SHEET DATA | |||||
In millions of pesos | June 30, 2018 | Dec. 31st, 2017 | Change | ||
$ | $ | $ | % | ||
TOTAL ASSETS | 52,787.6 | 50,557.4 | 2,230.2 | 4.4 | |
Cash and cash equivalents | 18,949.1 | 17,240.1 | 1,709.0 | 9.9 | |
Accounts receivable | 3,228.7 | 3,627.2 | (398.5) | (11.0) | |
TOTAL LIABILITIES | 15,022.1 | 14,879.5 | 142.6 | 1.0 | |
Accounts payable | 3,747.0 | 3,739.5 | 7.6 | 0.2 | |
Short-term debt | 3,351.8 | 3,695.1 | (343.2) | (9.3) | |
Long-term debt | 1,554.0 | 1,554.0 | (0.0) | (0.0) | |
TOTAL STOCKHOLDERS' EQUITY | 37,765.5 | 35,677.9 | 2,087.6 | 5.9 | |
Capital stock | 1,174.4 | 1,174.4 | 0.0 | 0.0 | |
Cash and equivalents as of June 30, 2018 totaled $18,949.1 million vs $17,240.1 million as of December 31, 2017.
Total debt as of June 30, 2018 was $4,905.8 million, compared to $5,249.0 million reported as of December 31, 2017, mainly as a result of lower short-term bank debt.
Net cash as of June 30, 2018 was $14,043.34 million, compared to net cash of $11,991.1 million as of December 31, 2017.
CAPITAL EXPENDITURES | |||||
In millions of pesos | 1H18 | 1H17 | Change | ||
$ | $ | $ | % | ||
Capital Expenditures | 780.5 | 1,092.9 | (312.4) | (28.6) | |
Total CAPEX for the 1H18 was $780.5 million and $1,092.9 million in 1H17, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION | ||
As of June 29, 2018 | ||
Total Shares | 600,000,000 | |
Total free float | 26.75% | |
Market cap (millions of pesos) | $57,114 | |
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-18 | 97.97 | 90.18 | 95.19 | 63.84 | 53.00 | 57.75 | |
May-18 | 97.44 | 90.48 | 91.10 | 61.63 | 54.89 | 54.86 | |
Apr-18 | 97.03 | 92.41 | 96.35 | 63.84 | 59.80 | 62.07 | |
Mar-18 | 96.47 | 92.37 | 95.30 | 62.67 | 58.83 | 61.95 | |
Feb-18 | 94.06 | 89.88 | 91.66 | 61.46 | 57.41 | 58.01 | |
Jan-18 | 98.16 | 93.03 | 95.65 | 63.83 | 57.88 | 61.94 | |
ANALYST COVERAGE | ||
Institution | Analyst name | |
ACTINVER | José Antonio Cebeira | jcebeira@actinver.com.mx |
BBVA BANCOMER | Miguel Ulloa | miguel.ulloa@bbva.com |
GBM | Miguel Tortolero | matortolero@gbm.com.mx |
SIGNUM RESEARCH | Martin Lara | martin.lara@signumresearch.com |
JPMORGAN | Ulises Argote | ulises.argote@jpmorgan.com |
INVEX | Giselle Mojica | gmojica@invex.com |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $19.87 per USD $1.0, which corresponds to the rate at the close of June 30, 2018, 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 | 2018 | 2018 | 2017* |
TOTAL ASSETS | $ 2,656.2 | 52,787.6 | 50,557.4 |
Total current assets | 1,513.9 | 30,086.3 | 28,225.0 |
Cash and cash equivalents | 953.5 | 18,949.1 | 17,240.1 |
Total accounts receivable | 162.5 | 3,228.7 | 3,627.2 |
Inventories | 352.2 | 7,000.1 | 6,669.5 |
Other current assets | 45.7 | 908.3 | 688.2 |
Total non current assets | 1,142.3 | 22,701.3 | 22,332.4 |
Net property, plant and equipment | 881.5 | 17,518.8 | 17,320.0 |
Other non current Assets | 260.8 | 5,182.5 | 5,012.3 |
TOTAL LIABILITIES | $ 755.9 | 15,022.1 | 14,879.5 |
Total current liabilities | 460.4 | 9,149.5 | 9,185.7 |
Notes payable to banks | 168.7 | 3,351.8 | 3,701.9 |
Accounts payable | 188.5 | 3,747.0 | 3,739.5 |
Other taxes payable and other accruals | 103.2 | 2,050.7 | 1,744.3 |
Total long-term liabilities | 295.5 | 5,872.6 | 5,693.8 |
Long-term debt | 78.2 | 1,554.0 | 1,554.0 |
Other non current liabilities | 13.7 | 271.5 | 296.4 |
Deferred income taxes | 203.6 | 4,047.1 | 3,843.4 |
TOTAL STOCKHOLDERS' EQUITY | $ 1,900.3 | 37,765.5 | 35,677.9 |
Capital stock | 59.1 | 1,174.4 | 1,174.4 |
Commission in shares issued | 20.9 | 414.5 | 414.4 |
Repurchased shares | - | - | - |
Retained earnings | 1,753.2 | 34,840.8 | 32,861.1 |
Others accounts | 63.9 | 1,269.2 | 1,169.1 |
Non controlling interest | 3.4 | 66.6 | 59.0 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,656.2 | 52,787.6 | 50,557.4 |
*Audited | |||
CONSOLIDATED STATEMENT OF INCOME | |||
Second Quarter Results, ended June 30: | |||
-Unaudited- | |||
U.S. Dollar | |||
In millions pesos | 2018 | 2018 | 2017* |
Net sales | $ 815.9 | 16,213.6 | 15,116.3 |
Cost of sales | 659.6 | 13,108.3 | 11,502.1 |
Gross profit | 156.3 | 3,105.3 | 3,614.2 |
SG&A | 74.9 | 1,489.1 | 1,297.6 |
Other income (expenses), net | 2.0 | 40.2 | 13.4 |
Operating income | 83.3 | 1,656.4 | 2,330.0 |
Net finance income | 28.3 | 562.1 | 96.8 |
Income tax | 32.3 | 641.8 | 703.9 |
Net Income | $ 79.3 | 1,576.7 | 1,722.8 |
Non-controlling interest | 0.12 | 2.3 | 1.5 |
Net controlling interest profit | 79.2 | 1,574.3 | 1,721.4 |
Basic and diluted earnings per share | 0.13 | 2.62 | 2.87 |
Basic and diluted earnings per ADR | 1.58 | 31.49 | 34.43 |
Weighted average Shares outstanding1 | 600,000 | 600,000 | 600,000 |
EBITDA Result | $ 99.4 | 1,976.0 | 2,596.8 |
Gross margin | 19.2% | 19.2% | 23.9% |
Operating margin | 10.2% | 10.2% | 15.4% |
Net margin | 9.7% | 9.7% | 11.4% |
EBITDA margin | 12.2% | 12.2% | 17.2% |
1 In thousands | |||
* Audited | |||
CONSOLIDATED STATEMENT OF INCOME | |||
Accumulated results, for the six months ended June 30. | |||
-Unaudited- | |||
U.S. Dollar | |||
In millions pesos | 2018 | 2018 | 2017 |
Net sales | $ 1,585.9 | 31,516.6 | 28,801.2 |
Cost of sales | 1,267.8 | 25,194.1 | 22,995.4 |
Gross profit | 318.1 | 6,322.5 | 5,805.8 |
Selling, general and administrative expenses | 144.6 | 2,874.6 | 2,558.9 |
Other income (expenses), net | 1.6 | 31.0 | 12.9 |
Operating income | 175.1 | 3,478.9 | 3,259.8 |
Net finance income | 23.6 | 468.4 | 27.0 |
Income tax | 55.8 | 1,109.6 | 911.2 |
Net income | $ 222.2 | 2,837.6 | 2,375.7 |
Non-controlling interest | 0.4 | 7.6 | 2.2 |
Net controlling interest profit | 143.2 | 2,830.0 | 2,373.5 |
Basic and diluted earnings per share | 0.24 | 4.72 | 3.96 |
Basic and diluted earnings per ADR | 2.85 | 56.6 | 47.47 |
Weighted average Shares outstanding1 | 599,990 | 599,990 | 599,973 |
EBITDA Result | $ 206.7 | 4,108.2 | 3,795.1 |
Gross margin | 20.1% | 20.1% | 20.2% |
Operating margin | 11.0% | 11.0% | 11.3% |
Net margin | 9.0% | 9.0% | 8.2% |
EBITDA margin | 13.0% | 13.0% | 13.2% |
1 In thousands | |||
*Audited | |||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||
In million of pesos | |||
-Unaudited- | |||
U.S. Dollar | June 30, | ||
2018 | 2018 | 2017 | |
NET MAJORITY INCOME BEFORE INCOME TAX | $ 198.6 | 3,947.2 | 3,286.9 |
ITEMS RELATING TO INVESTING ACTIVITIES: | 11.5 | 229.3 | 354.0 |
Depreciation and others | 30.2 | 600.7 | 535.3 |
Income (loss) on sale of plant and equipment | 0.3 | 6.9 | 11.6 |
Other Items | (19.0) | (378.4) | (192.9) |
NET CASH GENERATED FROM NET INCOME BEFORE TAXES | 210.2 | 4,176.5 | 3,640.8 |
CASH GENERATED OR USED IN THE OPERATION: | (78.6) | (1,562.8) | (669.5) |
Decrease (increase) in accounts receivable | (6.1) | (120.7) | 472.0 |
Decrease (increase) in inventories | (9.2) | (182.8) | (543.5) |
Increase (decrease) in accounts payable | (11.4) | (226.5) | (27.6) |
Increase (decrease) in other liabilities | (52.0) | (1,032.8) | (570.3) |
NET CASH FLOW FROM OPERATING ACTIVITIES | 131.5 | 2,613.7 | 2,971.4 |
NET CASH FLOW FROM INVESTING ACTIVITIES | (6.5) | (130.1) | (526.2) |
Acquisition of property, plant and equipment | (39.3) | (780.5) | (1,092.9) |
Proceeds from sales of property plant and equipment | 0.6 | 11.4 | 18.9 |
Other Items | 32.2 | 639.0 | 547.8 |
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN | 125.0 | 2,483.6 | 2,445.2 |
Net cash provided by financing activities: | (39.0) | (774.6) | (1,281.7) |
Proceeds from loans | 159.9 | 3,177.5 | 2,539.6 |
Principal payments on loans | (173.9) | (3,455.1) | (2,646.8) |
Dividends paid | (21.4) | (426.0) | (390.0) |
Other items | (3.6) | (70.9) | (784.5) |
Net increase (decrease) in cash and equivalents | 86.0 | 1,709.0 | 1,163.5 |
Cash and investments at the beginning of year | $ 867.5 | 17,240.1 | 15,651.5 |
CASH AND INVESTMENTS AT END OF PERIOD | $ 953.5 | 18,949.1 | 16,815.0 |
DERIVATIVES POSITION REPORT | |||||||||
Second Quarter 2018 | |||||||||
Thousands of Mexican Pesos, as of June 30, 2018 | |||||||||
TYPE OF FINANCIAL | OBJECTIVE | NOTIONAL | VALUE OF THE RELATED COMMODITY | REASONABLE VALUE | AMOUNTS DUE | ||||
2Q-2018 | 1Q-2018 | 2Q-2018 | 1Q-2018 | ||||||
Forward Vanilla and | Hedge | $ 618,394 | $ 19.87 | $ 18.30 | $ 22,128 | $-41,144 | in 2018 | ||
Futures for corn and | Hedge | $ 266,596 | CORN | CORN | -$22,830 | $ 842 | in 2018 | ||
In USD per Bushel | In USD per Bushel | ||||||||
month | price | month | price | ||||||
May-18 | $ 3.878 | ||||||||
Sep-18 | $ 3.595 | Sep-18 | $ 4.033 | ||||||
SOYBEAN MEAL | SOYBEAN MEAL | ||||||||
In USD per ton | In USD per ton | ||||||||
month | price | month | price | ||||||
Aug-18 | $ 331.0 | May-18 | $ 384.0 | ||||||
Sep-18 | $ 330.9 | ||||||||
Options of Corn | Hedge | $ 886,923 | CORN | CORN | $ 27,537 | $ 814 | 99% in 2018 | ||
In USD per Bushel | In USD per Bushel | ||||||||
month | price | month | price | ||||||
May-18 | $ 3.8775 | ||||||||
Jul-18 | $ 3.678 | ||||||||
Sep-18 | $ 3.595 | Sep-18 | $ 4.033 | ||||||
Dec-18 | $ 3.713 | Dec-18 | $ 3.970 | ||||||
Mar-19 | $ 3.813 | Mar-19 | $ 4.183 | ||||||
Options of soybean | Hedge | $ 49,045 | SOYBEAN MEAL | SOYBEAN MEAL | -$ 2,884 | -$ 784 | 73% in 2018 | ||
In USD per ton | In USD per ton | ||||||||
month | price | month | price | ||||||
May-18 | $ 384.0 | ||||||||
Jul-18 | $ 325.3 | ||||||||
Aug-18 | $ 331.0 | Aug-18 | $ 383.2 | ||||||
Sep-18 | $ 330.9 | Sep-18 | $ 380.0 | ||||||
Oct-18 | $ 330.3 | Oct-18 | $ 376.3 | ||||||
Dec-18 | $ 329.9 | Dec-18 | $ 374.7 | ||||||
Jan-19 | $ 328.0 | Jan-19 | $ 370.8 | ||||||
Mar-19 | $ 323.1 | Mar-19 | $ 362.5 | ||||||
-The total financial instruments do not exceed 5% of total assets as of June 30, 2018. | |||||||||
-The notional value represents the net position as of June 30, 2018 at the exchange rate of Ps. 19.87 per one dolar. | |||||||||
-A negative value means an unfavorable effect for the Company. | |||||||||
PROBABLE SCENARIO | ||||||||
Second Quarter 2018 | ||||||||
Thousands of Mexican Pesos, as of June 30, 2018 | PROBABLE SCENARIO | |||||||
TYPE OF FINANCIAL | REASONABLE | VALUE OF THE RELATED COMMODITY | EFFECT ON THE | EFFECT ON THE CASH FLOW(3) | ||||
Reference Value | ||||||||
-2.5% | 2.5% | 5.0% | -2.5% | 2.5% | 5.0% | |||
Forwards Vanilla and Ko | $ 22,128 | $19.37 | $20.37 | $20.86 | Direct | $ 6,668 | $35,561 | $ 50,524 |
-5% | 5% | 10% | -5% | 5% | 10% | |||
Futures of Corn: (2) | -$ 22,830 | $3.415 | $3.775 | $3.955 | The effect will | -$36,160 | -$ 9,500 | $ 3,830 |
Futures of Soybean Meal: (2) | $314.5 | $347.6 | $364.1 | |||||
Options for Corn | $ 27,537 | $3.415 | $3.775 | $3.955 | $ 68,838 | $ 2,482 | $ 2,510 | |
Options of Soybean Meal | -$ 2,884 | $314.5 | $347.6 | $364.1 | -$ 5,336 | -$ 431 | $ 2,021 | |
(1) The reference value is the exchange rate of Ps. $19.87 per USD as of June 30, 2018. | ||||||||
(2) The reference values are; the future of corn for Sep 2018, $3.595 USD/bushel and the future of soybean meal for Aug 2018, $331.0 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 2018 | ||||||||||
Thousands of Mexican Pesos, as of June 30, 2018 | STRESS SCENARIO | |||||||||
TYPE OF FINANCIAL | REASONABLE | VALUE OF THE RELATED COMMODITY | EFFECT ON THE | EFFECT ON THE CASH FLOW | ||||||
Reference Value | ||||||||||
-50% | -25% | 25% | 50% | -50% | -25% | 25% | 50% | |||
Forward Vanilla | $ 22,128 | $9.94 | $14.90 | $24.84 | $29.81 | Direct | -$287,069 | -$132,471 | $170,229 | $319,860 |
CONFERENCE CALL INFORMATION
The Company will host its second quarter 2018 earnings call, on Tuesday, July 24th, 2018. 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=UVbMZlJnnVSWrc
Confirmation Number: 47222762
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:
maria.jaquez@bachoco.net
andrea.guerrero@bachoco.net
T. +52(461)618 3555
View original content:http://www.prnewswire.com/news-releases/industrias-bachoco-announces-second-quarter-2018-results-300684610.html
SOURCE Industrias Bachoco, S.A.B. de C.V.
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