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Industrias Bachoco Announces Third Quarter 2018 Results

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Industrias Bachoco Announces Third Quarter 2018 Results

PR Newswire

CELAYA, Mexico, Oct. 24, 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 third quarter ("3Q18") and accumulated ("9M18") 2018 results ending September 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 vs. 2017

  • Net sales decreased 0.7% in 3Q18 compared to 3Q17.
  • EBITDA margin was 0.5% for 3Q18 vs 10.2% in 3Q17.
  • Earnings per basic and diluted share were negative by $0.32 for 3Q18, vs a positive result of $1.66 in 3Q17.

CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "We faced a more than expected, challenging third quarter in our Mexico and U.S. operations.

"In Mexico, as it is typical for a 3rd quarter, we observed a lower demand, and our prices were affected negatively, even more than we expected and on the other hand, we also saw higher cost of sales. The combination of those two conditions caused an important adjustment in our margins.

"In the U.S. industry we observed oversupply conditions for all main animal proteins which continued pushing poultry prices to low levels, impacting margins also in our U.S. operation.

"Our EBITDA margin for the quarter was 0.5%, which was lower than the EBITDA margin of the third quarter of 2017. As a result, our EBITDA for the nine months of the year was 9.1%, lower when compared to 12.2% EBITDA margin of the same period of 2017.

"Despite the challenging conditions of this quarter, our financial structure continues strong.  We ended the quarter with a net cash position of $12,382.6, and the fundamentals of our company remain in place.

"We are confident that our financial discipline, our focus on capturing efficiencies and being close to our customers, will allow us to improve our results as soon as industry conditions recover and we will be able to take advantage of the opportunities that may arise in the future."

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


3Q18

3Q17

Change



$

$

$

%

Net sales


14,114.4

14,216.2

(101.8)

(0.7)

Net sales in Mexico


9,865.0

9,918.5

(53.5)

(0.5)

Net sales in the U.S.


4,249.4

4,297.7

(48.3)

(1.1)






NET SALES BY SEGMENT





In millions of pesos


3Q18

3Q17

Change



$

$

$

%

Net sales


14,114.4

14,216.2

(101.8)

(0.7)

Poultry


12,844.8

12,970.1

(125.4)

(1.0)

Others


1,269.7

1,246.1

23.6

1.9

 

NET VOLUME SOLD BY SEGMENT





In tons


3Q18

3Q17

Change



$

$

$

%

Net sales


539,823

541,710

(1,886.6)

(0.3)

Poultry


441,135

422,278

18,856.7

4.5

Others


98,688

119,432

(20,743.3)

(17.4)

The Company's 3Q18 net sales totaled $14,114.4 million, $101.8 million or 0.7% less than the $14,216.2 million reported in 3Q17.  The decrease is mainly a result of lower prices and less volume sold in our other business segment when compared to 3Q17.

In 3Q18, the sales of our U.S. operations represented 30.1% of our total sales; this compares with 30.2% it represented in 3Q17 of our total sales.

GROSS PROFIT





In millions of pesos


3Q18

3Q17

Change



$

$

$

%

Cost of sales


12,955.6

11,732.3

1,223.2

10.4

Gross profit


1,158.9

2,483.9

(1,325.0)

(53.3)

Gross margin


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