CELAYA, Mexico, Oct. 23, 2019 /PRNewswire/ -- Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", IBA BMV: Bachoco))) announced today its unaudited results for the third quarter ("3Q19") and first nine months of 2019 ("9M19") ended on September 30th, 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 8.5% in 3Q19 and 1.9% in 9M19
- SG&A expenses as a percentage of net sales were 9.8% in 3Q19 and 9.7% in 9M19
- EBITDA margin was 9.8% for 3Q19 and 10.0% in 9M19
- Earnings per basic and diluted share were $1.85 for 3Q18 and $5.00 for 9M19.
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "We entered the third quarter with good demand conditions in the poultry market which resulted in good unseasonal prices for the first part of the quarter. Mainly, as a result of a good balance between supply and demand and due to less uncertain conditions in the economic environment in Mexico, when compared to the same period of 2018.
This allowed us to reach an increase in total sales of 8.5% in the quarter, and an increase of 1.9% for the 9M19, when compared to the same periods of 2018 respectively.
In terms of cost of sales, prices of our main raw material for both corn and soybean meal, started at high levels and dropped by the end of the quarter, which combined with our hedging strategy allowed us to report a lower cost for 3Q19 when compared to the same period of 2018.
As a result, we reached an EBITDA of $1,505.8 million in 3Q19, significantly higher than the EBITDA in the same quarter of 2018. For the third quarter, our EBITDA margin in 3Q19 was 9.8% versus a 0.5% margin in 3Q18. As a result, our EBITDA margin for the nine months of this year was 10.0%, higher when compared to 9.1% EBITDA margin of the same period of 2018.
We reached an income per share of $1.85 pesos, which one of the highest for the previous five years for a third quarter. For the first 9M19 our income per share was $5.00 pesos higher than the $4.43 pesos for the same period of 2018.
On the other hand, SG&A expenses in 3Q19 were $1,497.6, meaning a reduction of $1.4 million vs 3Q18 that were $1,499.1 million. Total SG&A expenses as a percentage of net sales represented 9.8% in 3Q19 and 10.6% in 3Q18.
Our financial structure continued strong as we ended the quarter with a net cash of $13,275.3 million, which will allow us to continue supporting 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 | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Net Sales | 15,312.9 | 14,114.4 | 1,198.4 | 8.5 | |
Net sales in Mexico | 10,981.4 | 9,865.0 | 1,116.4 | 11.3 | |
Net sales in the U.S. | 4,331.5 | 4,249.4 | 82.1 | 1.9 | |
NET SALES BY SEGMENT | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Net Sales | 15,312.9 | 14,114.4 | 1,198.4 | 8.5 | |
Poultry | 13,879.8 | 12,844.7 | 1,035.0 | 8.1 | |
Other | 1,433.1 | 1,269.7 | 163.4 | 12.9 | |
NET VOLUME SOLD BY SEGMENT | ||||||
In tons | Change | |||||
3Q19 | 3Q18 | Volume | % | |||
Total sales volume: | 550,640 | 539,823 | 10,816.4 | 2.0 | ||
Poultry | 424,645 | 441,135 | (16,490.0) | (3.7) | ||
Others | 125,994 | 98,688 | 27,306.4 | 27.7 | ||
The Company's 3Q19 net sales totaled $15,312.9 million; $1,198.4 million or 8.5% more than $14,114.4 million reported in 3Q18. The increase is a result of better prices in poultry and higher volume sold in our Other segment, particularly in balance feed.
In 3Q19, sales of our U.S. operations represented 28.3% of our total sales compared to 30.1% in 3Q18.
GROSS PROFIT | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Cost of sales | 12,706.5 | 12,955.6 | (249.0) | (1.9) | |
Gross profit | 2,606.4 | 1,158.9 | 1,447.5 | 124.9 | |
Gross margin | 17.0% | 8.2% | - | - | |
In 3Q19, cost of sales was $12,706.5 million; $249.0 million or 1.9% lower than $12,955.6 million reported in 3Q18. This decrease was mainly due to lower unit cost in our main business lines and due to lower volume sold in poultry.
The Company's gross profit in 3Q19 was $2,606.4 million, higher than the gross profit of $1,158.9 million in 3Q18, with a gross margin of 17.0% for 3Q19 vs 8.2% in 3Q18.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Total SG&A | 1,497.6 | 1,499.1 | (1.4) | (0.1) | |
Total SG&A expenses in 3Q19 were $1,497.6 million; $1.4 million lower than the $1,499.1 million reported in 3Q18. Total SG&A expenses as a percentage of net sales represented 9.8% in 3Q19 and 10.6% in 3Q18.
OTHER INCOME (EXPENSE), NET | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Other income (expense), net | 73.0 | 79.7 | (6.7) | (8.4) | |
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 3Q19, we recorded other income of $73.0 million, compared with other income of $79.7 million reported in 3Q18.
OPERATING INCOME | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Operating income | 1,181.8 | (260.5) | 1,442.3 | (553.7) | |
Operating margin | 7.7% | (1.8)% | - | - | |
Operating income in 3Q19 totaled $1,181.8 million; $1,442.3 million higher than the Operating loss of $260.5 million reported in 3Q18. This represents a positive operating margin of 7.7% for 3Q19, versus a negative operating margin in the same period of 2018. The increase in operating income is mainly attributed to higher Poultry prices and higher volume sold in Other segment, combined with lower cost of sales and lower SG&A.
NET FINANCIAL INCOME | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Net Financial Income | 405.7 | (63.6) | 469.3 | (738.0) | |
Financial Income | 486.7 | 294.1 | 192.5 | 65.5 | |
Financial Expense | 81.0 | 357.7 | (276.8) | (77.4) | |
In 3Q19, the Company reported net financial income of $405.7 million, compared to a negative financial income of $63.6 million reported in the same period of 2018. The increase is mainly attributed to higher exchange rate gains.
TAXES FOR THE PERIOD | ||||||
In millions of pesos | 3Q19 | 3Q18 | Change | |||
$ | $ | $ | % | |||
Total Taxes | 474.4 | (136.6) | 611.0 | (447.3) | ||
Income tax | 48.2 | (208.4) | 256.6 | (123.1) | ||
Deferred income tax | 426.1 | 71.8 | 354.4 | 493.8 | ||
Total taxes for the 3Q19 were $474.4 million, which is higher when compared with total taxes of the same period of 2018. This is attributed to higher operating income in 3Q19.
NET INCOME | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Net income | 1,113.1 | (187.5) | 1,300.6 | (693.8) | |
Net margin | 7.3% | (1.3%) | - | - | |
Basic and diluted earnings per share1 | 1.85 | (0.32) | 2.2 | n/a | |
Basic and diluted earnings per ADR2 | 22.23 | (3.79) | 26.0 | n/a | |
Weighted average Shares outstanding3 | 600,000 | 600,000 | - | - | |
1In pesos | |||||
2in pesos, one ADR equals to twelve shares | |||||
3In thousands of shares | |||||
The net income for 3Q19 was $1,113.1 million, representing a basic and diluted income of $1.85 pesos per share, compared with a net loss of $187.5 million, which represented a $0.32 pesos of net loss per share in 3Q18. This increase is mainly attributed to higher operating results. Net margin in 3Q19 was 7.3% compared to a negative margin of 1.3% reported in 3Q18.
EBITDA | |||||
In millions of pesos | 3Q19 | 3Q18 | Change | ||
$ | $ | $ | % | ||
Net income | 1,111.3 | (189.7) | 1,301.1 | (685.8) | |
Income tax expense (benefit) | 474.4 | (136.6) | 611.0 | (447.3) | |
Result in associates | 1.8 | 2.3 | (0.5) | (21.8) | |
Net finance (income) expense | (405.7) | 63.6 | (469.3) | (738.0) | |
Depreciation and amortization | 324.0 | 336.6 | (12.6) | (3.7) | |
EBITDA | 1,505.8 | 76.2 | 1,429.7 | 1,877.3 | |
EBITDA Margin (%) | 9.8% | 0.5% | - | - | |
Net revenues | 15,312.9 | 14,114.4 | 1,198.4 | 8.5 | |
EBITDA in 3Q19 reached $1,505.8 million representing an EBITDA margin of 9.8%, compared to an EBITDA of $76.2 million in 3Q18, with an EBITDA margin of 0.5%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY | |||||
In millions of pesos | 9M19 | 9M18 | Change | ||
$ | $ | $ | % | ||
Net Sales | 46,520.6 | 45,631.1 | 889.5 | 1.9 | |
Net sales in Mexico | 33,815.4 | 32,510.5 | 1,304.9 | 4.0 | |
Net sales in the U.S. | 12,705.2 | 13,120.6 | (415.4) | (3.2) | |
NET SALES BY SEGMENT | |||||
In millions of pesos | 9M19 | 9M18 | Change | ||
$ | $ | $ | % | ||
Net Sales | 46,520.6 | 45,631.1 | 889.5 | 1.9 | |
Poultry | 41,991.8 | 41,335.4 | 656.4 | 1.6 | |
Other | 4,528.8 | 4,295.7 | 233.1 | 5.4 | |
NET VOLUME SOLD BY SEGMENT | ||||||
In metric tons | Change | |||||
9M19 | 9M18 | Volume | % | |||
Total sales volume: | 1,679,544 | 1,637,860 | 41,684 | 2.55 | ||
Poultry | 1,286,960 | 1,294,632 | (7,671) | (0.6) | ||
Others | 392,584 | 343,229 | 49,355 | 14.38 | ||
During the 9M19, net sales totaled $46,520.6 million; $889.5 million or 1.9% more than the $45,631.1 million reported in the same period of 2018.
In 9M19, sales of our U.S. operations represented 27.3% of our total sales, compared with 28.8% in 9M18.
OPERATING RESULTS | |||||
In millions of pesos | 9M19 | 9M18 | Change | ||
$ | $ | $ | % | ||
Cost of Sales | 38,386.7 | 38,149.7 | 237.1 | 0.6 | |
Gross Profit | 8,133.9 | 7,481.4 | 652.5 | 8.7 | |
Total SG&A | 4,522.8 | 4,373.7 | 149.1 | 3.4 | |
Other Income (expense) | 69.6 | 110.7 | (41.0) | (37.1) | |
Operating Income | 3,680.7 | 3,218.4 | 462.3 | 14.4 | |
Net Financial Income | 573.3 | 404.8 | 168.5 | 41.6 | |
Income Tax | 1,246.4 | 973.0 | 273.4 | 28.1 | |
Net Income | 3,007.5 | 2,650.1 | 357.4 | 13.5 | |
In the 9M19, the cost of sales totaled $38,386.7 million; $237.1 million or 0.6% higher than $38,149.7 million reported in the 9M18.
As a result, we reached a gross profit of $8,133.9 million and a gross margin of 17.5% in 9M19, when compare to $7,481.4 million of gross profit and a gross margin of 16.4% reached in the same period of 2018.
Total SG&A expenses in 9M19 were $4,522.8 million; $149.1 million or 3.4% more than the $4,373.7 million reported in 9M18. In 9M19 total SG&A expenses as a percentage of net sales represented 9.7%, slightly higher compared to the 9.6% on 9M18.
In 9M19 we had other income of $69.6 million, compared with other income of $110.7 million reported in 9M18.
The operating income in 9M19 was $3,680.7 million, which represents an operating margin of 7.9%, an increase from an operating income of $3,218.4 million and an operating margin of 7.1% in 9M18.
The net financial income in 9M19 was $573.3 million, higher when compared to a net financial income of $404.8 million in 9M18.
Total taxes were $1,246.4 million as of September 30th, 2019. These taxes include $749.8 million of income tax and $496.7 million of deferred income taxes. This figure compares to total taxes of $973.0 million in 9M18; the increase was mainly attributed to a higher income before taxes.
All the above resulted in a net income of $3,007.5 million or 6.5% of net margin in the 9M19, which represents $5.00 pesos of earnings per share; while in the 9M18 the net income totaled $2,650.1 million, 5.8% of net margin and $4.40 pesos of net income per share.
EBITDA | |||||
In millions of pesos | 9M19 | 9M18 | Change | ||
$ | $ | $ | % | ||
Net controlling interest profit | 2,998.9 | 2,640.3 | 358.7 | 13.6 | |
Income tax expense (benefit) | 1,246.4 | 973.0 | 273.4 | 28.1 | |
Result in associates | 8.6 | 9.9 | (1.3) | (13.0) | |
Net finance (income) expense | (573.3) | (404.8) | (168.5) | 41.6 | |
Depreciation and amortization | 963.3 | 937.4 | 26.0 | 2.8 | |
EBITDA | 4,644.0 | 4,155.7 | 488.3 | 11.7 | |
EBITDA Margin (%) | 10.0% | 9.1% | - | - | |
Net revenues | 46,520.6 | 45,631.1 | 889.5 | 1.9 | |
EBITDA in 9M19 reached $4,644.0 million, representing an EBITDA margin of 10.0%, compared to EBITDA of $4,155.7 million in 9M18, with an EBITDA margin of 9.1%.
BALANCE SHEET
BALANCE SHEET DATA | |||||
In millions of pesos | Sep 30, 2019 | Dec. 31st, 2018 | Change | ||
$ | $ | $ | % | ||
TOTAL ASSETS | 55,450.3 | 52,865.6 | 2,584.7 | 4.9 | |
Cash and cash equivalents | 18,283.1 | 18,458.5 | (175.4) | (1.0) | |
Accounts receivable | 4,179.9 | 3,486.5 | 693.5 | 19.9 | |
TOTAL LIABILITIES | 15,111.2 | 14,699.9 | 411.3 | 2.8 | |
Accounts payable | 3,478.9 | 4,228.4 | (749.6) | (17.7) | |
Short-term debt | 3,514.7 | 3,492.8 | 21.9 | 0.6 | |
Long-term debt | 1,493.1 | 1,544.8 | (51.7) | (3.3) | |
TOTAL STOCKHOLDERS' EQUITY | 40,339.2 | 38,165.7 | 2,173.4 | 5.7 | |
Capital stock | 1,174.4 | 1,174.3 | 0.1 | 0.0 | |
Cash and equivalents as of September 30th, 2019 totaled $18,283.1 million vs $18,458.6 million as of December 31, 2018.
Total debt as of September 30th, 2019 was $5,007.8 million, compared to $5,037.6 million reported as of December 31, 2018.
Net cash as of September 30th, 2019 was $13,275.3 million, compared to net cash of $13,420.9 million as of December 31, 2018.
CAPITAL EXPENDITURES | |||||
In millions of pesos | 9M19 | 9M18 | Change | ||
$ | $ | $ | % | ||
Capital Expenditures | 1,301.2 | 1,329.0 | (27.8) | (2.1 ) | |
Total CAPEX for the 9M19 was $1,301.2 million vs $1,329.0 million in 9M18, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION | ||
As of September 30, 2019 | ||
Total Shares | 600,000,000 | |
Total free float | 26.75% | |
Market cap (millions of pesos) | $52,116 | |
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 | |||||||
Sep-19 | 92.44 | 84.51 | 86.86 | 56.34 | 51.68 | 53.23 | |||||||
Aug-19 | 91.65 | 82.89 | 91.65 | 55.01 | 50.41 | 55.01 | |||||||
Jul-19 | 86.70 | 80.00 | 86.70 | 54.18 | 50.09 | 54.04 | |||||||
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 Plácido | |
BBVA BANCOMER | Pablo Abraham Peregrina | |
GBM | Miguel Tortolero | |
INVEX | Giselle Mojica | |
JP MORGAN | Ulises Argote | |
SANTANDER | Luis Miranda |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $19.72 per USD $1.0, which corresponds to the rate at the close of September 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 INCOME Third Quarter Results, ended September 30th: -Unaudited- U.S. Dollar In millions pesos 2019 2019 2018* Net sales $ 776.5 15,312.9 14,114.4 Cost of sales 644.3 12,706.5 12,955.6 Gross profit 132.2 2,606.4 1,158.9 SG&A 75.9 1,497.6 1,499.1 Other income (expenses), net 3.7 73.0 79.7 Operating income 59.9 1,181.8 -260.5 Net finance income 20.6 405.7 -63.6 Income tax 24.1 474.4 (136.6) Net Income $ 56.4 1,113.1 (187.5) Non-controlling interest 0.09 1.8 2.3 Net controlling interest profit 56.4 1,111.3 (189.7) Basic and diluted earnings per share 0.09 1.85 (0.32) Basic and diluted earnings per ADR 1.13 22.23 (3.79) Weighted average Shares outstanding1 600,000 600,000 600,000 EBITDA Result $ 76.4 1,505.8 76.2 Gross margin 17.0% 17.0% 8.2% Operating margin 7.7% 7.7% -1.8% Net margin 7.3% 7.3% -1.3% EBITDA margin 9.8% 9.8% 0.5% 1 In thousands * Audited
CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the nine months ended September 30. -Unaudited- U.S. Dollar In millions pesos 2019 2019 2018* Net sales $ 2,359.1 46,520.6 45,631.1 Cost of sales 1,946.6 38,386.7 38,149.7 Gross profit 412.5 8,133.9 7,481.4 Selling, general and administrative expenses 229.4 4,522.8 4,373.7 Other income (expenses), net 3.5 69.6 110.7 Operating income 186.6 3,680.7 3,218.4 Net finance income 29.1 573.3 404.8 Income tax 63.2 1,246.4 973.0 Net income $ 152.5 3,007.5 2,650.1 Non-controlling interest 0.4 8.6 9.9 Net controlling interest profit 152.1 2,998.9 2,640.3 Basic and diluted earnings per share 0.25 5.00 0.00 Basic and diluted earnings per ADR 3.04 60.0 0.05 Weighted average Shares outstanding1 599,973 599,973 599,993 EBITDA Result $ 235.5 4,644.0 4,155.7 Gross margin 17.5% 17.5% 16.4% Operating margin 7.9% 7.9% 7.1% Net margin 6.4% 6.5% 5.8% EBITDA margin 10.0% 10.0% 9.1% 1 In thousands * Audited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION -Unaudited- In U.S. Dollar September 30, December 31, In million pesos 2019 2019 2018* TOTAL ASSETS $ 2,811.9 55,450.3 52,865.6 Total current assets 1,556.2 30,689.1 29,775.0 Cash and cash equivalents 927.1 18,283.1 18,458.5 Total accounts receivable 212.0 4,179.9 3,486.5 Inventories 349.8 6,897.7 6,649.1 Other current assets 67.4 1,328.3 1,180.9 Total non current assets 1,255.6 24,761.3 23,090.6 Net property, plant and equipment 927.6 18,291.6 18,018.2 Other non current Assets 328.1 6,469.7 5,072.4 TOTAL LIABILITIES $ 766.3 15,111.2 14,699.9 Total current liabilities 418.6 8,254.1 9,084.9 Notes payable to banks 178.2 3,514.7 3,492.8 Accounts payable 176.4 3,478.9 4,228.4 Other taxes payable and other accruals 63.9 1,260.4 1,363.7 Total long-term liabilities 347.7 6,857.1 5,614.9 Long-term debt 75.7 1,493.1 1,544.8 Other non current liabilities 63.7 1,256.0 302.8 Deferred income taxes 208.3 4,108.0 3,767.3 TOTAL STOCKHOLDERS' EQUITY $ 2,045.6 40,339.2 38,165.7 Capital stock 59.6 1,174.4 1,174.3 Commission in shares issued 21.0 414.5 414.5 Retained earnings 1,902.6 37,519.8 35,354.5 Others accounts 58.4 1,152.4 1,153.0 Non controlling interest 4.0 78.0 69.5 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,811.9 55,450.3 52,865.6 *Audited
CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar September 30, 2019 2019 2018* NET MAJORITY INCOME BEFORE INCOME TAX $ 215.7 4,254.0 3,623.2 ITEMS RELATING TO INVESTING ACTIVITIES: 17.4 343.8 362.1 Depreciation and others 48.9 963.3 937.4 Income (loss) on sale of plant and equipment (5.0) (99.1) 20.3 Other Items (26.4) (520.4) (595.6) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 233.2 4,597.8 3,985.2 CASH GENERATED OR USED IN THE OPERATION: (164.2) (3,238.9) (2,147.3) Decrease (increase) in accounts receivable 24.8 489.6 111.2 Decrease (increase) in inventories (20.2) (398.1) 50.0 Increase (decrease) in accounts payable (111.5) (2,199.0) (578.0) Other Items (57.4) (1,131.5) (1,730.6) NET CASH FLOW FROM OPERATING ACTIVITIES 68.9 1,358.9 1,837.9 NET CASH FLOW FROM INVESTING ACTIVITIES (29.6) (583.1) (353.5) Acquisition of property, plant and equipment (66.0) (1,301.2) (1,329.0) Proceeds from sales of property plant and equipment 9.5 186.9 12.8 Other Items 26.9 531.2 962.7 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 39.3 775.7 1,484.4 Net cash provided by financing activities: (50.3) (992.1) (1,538.1) Proceeds from loans 246.4 4,859.0 3,237.5 Principal payments on loans (246.4) (4,858.6) (3,456.1) Dividends paid (42.6) (840.0) (852.0) Other items (7.7) (152.5) (467.4) Net increase (decrease) in cash and equivalents (11.0) (216.3) (53.7) Cash and investments at the beginning of year $ 961.0 18,451.9 17,240.1 CASH AND INVESTMENTS AT END OF PERIOD $ 924.7 18,23050.6 17,1086.4 *Audited
DERIVATIVES POSITION REPORT
Third Quarter 2019 | ||||||||||
Thousands of Mexican Pesos, as of September 30, 2019 | ||||||||||
TYPE OF FINANCIAL INSTRUMENT | OBJECTIVE | NOTIONAL | VALUE OF THE RELATED COMMODITY | REASONABLE VALUE | AMOUNTS DUE BY YEAR | GUARANTIES REQUIRED | ||||
3Q-2019 | 2Q-2019 | 3Q-2019 | 2Q-2019 | |||||||
Forward Vanilla | Hedge | $ 20,798 | $19.72 | $19.20 | $-2,595 | $-11,503 | 70% in 2019 and 30% in 2020 | The deals consider the possibility of margin calls but not another kind of guarantee | ||
Futures for corn and soybean meal | Hedge | $ 218,171 | CORN | CORN | $ 4,898 | $ 5,654 | 55% in 2019; 45% in 2020 | |||
In USD per Bushel | In USD per Bushel | |||||||||
month | price | month | price | |||||||
Mar-20 | $ 3.995 | Mar-20 | $ 4.395 | |||||||
May-20 | $ 4.053 | |||||||||
Jul-20 | $ 4.085 | |||||||||
Sep-19 | $ 4.248 | |||||||||
Dec-19 | $ 3.880 | Dec-19 | $ 4.315 | |||||||
SOYBEAN MEAL | SOYBEAN MEAL | |||||||||
In USD per ton | In USD per ton | |||||||||
month | price | month | price | |||||||
Jan-20 | $ 302.8 | Aug-19 | $ 315.3 | |||||||
Mar-20 | $ 306.2 | Jan-20 | $ 324.8 | |||||||
May-20 | $ 310.4 | Mar-20 | $ 327.0 | |||||||
Jul-20 | $ 314.8 | May-20 | $ 329.0 | |||||||
Aug-20 | $ 316.7 | Jul-20 | $ 331.0 | |||||||
Sep-20 | $ 317.7 | Aug-20 | $ 331.4 | |||||||
Oct-20 | $ 317.7 | Sep-20 | $ 331.6 | |||||||
Dec-20 | $ 319.5 | Oct-20 | $ 330.4 | |||||||
Options of Corn | Hedge | $ 727,945 | CORN | CORN | $ 113 | $ 11,339 | 92% in 2019; 8% in 2020 | |||
In USD per Bushel | In USD per Bushel | |||||||||
month | price | month | price | |||||||
Dec-19 | $ 3.880 | Jul-19 | $ 3.752 | |||||||
Mar-20 | $ 3.995 | Sep-19 | $ 4.248 | |||||||
May-20 | $ 4.053 | Dec-19 | $ 4.315 | |||||||
Jul-20 | $ 4.085 | Jan-20 | $ 4.395 | |||||||
Options of soybean meal | Hedge | $ 73,521 | SOYBEAN MEAL | SOYBEAN MEAL | -$ 1,290 | $ 2,738 | 52% in 2019; 48% in 2020 | |||
In USD per ton | In USD per ton | |||||||||
month | price | month | price | |||||||
Dec-19 | $ 301.0 | Aug-19 | $ 315.3 | |||||||
Jan-20 | $ 302.8 | Sep-19 | $ 313.0 | |||||||
Mar-20 | $ 306.2 | Oct-19 | $ 325.9 | |||||||
May-20 | $ 310.4 | Dec-19 | $ 316.8 | |||||||
Jul-20 | $ 314.8 | Jan-20 | $ 324.8 | |||||||
Mar-20 | $ 327.0 | |||||||||
-The total financial instruments do not exceed 5% of total assets as of September 30, 2019. | ||||||||||
-The notional value represents the net position as of September 30, 2019 at the exchange rate of Ps. 19.72 per one dollar. | ||||||||||
-A negative value means an unfavorable effect for the Company. | ||||||||||
Third Quarter 2019 Thousands of Mexican Pesos, as of September 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 -$ 2,595 $19.23 $ 20.21 $ 20.71 Direct -$ 12,848 $ 7,659 $ 17,912 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 4,898 $ 3.686 $ 4.074 $ 4.268 The effect will materialize as the inventory is consumed -$ 5,976 $ 20,432 $ 33,636 Futures of Soybean Meal: (2) $ 287.7 $ 317.9 $ 333.1 Options for Corn $ 113 $ 3.686 $ 4.074 $ 4.268 -$ 1,918 $ 3,589 $ 7,329 Options of Soybean Meal -$ 1,290 $ 287.7 $ 317.9 $ 333.1 -$ 4,966 $ 2,386 $ 6,062 (1) The reference value is the exchange rate of Ps. $19.72 per USD as of September 30, 2019. (2) The reference values are; the future of corn for Dec 2019, $3.880 USD/bushel and the future of soybean meal for Jan 2020, $302.80 USD/ton. 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company.
Third Quarter 2019 Thousands of Mexican Pesos, as of September 30, 2019 STRESS SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50% -25% 25% 50% -50% -25% 25% 50% Forward Vanilla -$ 2,595 $9.86 $14.79 $24.65 $29.58 Direct -$207,664 -$105,129 $99,940 $202,474
CONFERENCE CALL INFORMATION
The Company will host its third quarter 2019 earnings call, on Thursday, October 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=UNFLnKAclbtcKD
Confirmation Number: 49094800
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
SOURCE Industrias Bachoco, S.A.B. de C.V.
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