Market Overview

Bachoco Announces First Quarter 2019 Results

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CELAYA, Mexico, April 29, 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 first quarter ("1Q19") ending March 31, 2019. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$"), except earnings per share.

HIGHLIGHTS- 2019 vs. 2018

  • Net sales decreased 6.4% in 1Q19.
  • EBITDA margin was 4.6% in 1Q19 vs 13.7% in 1Q18, our EBITDA was $654.9 million.
  • Earnings per basic and diluted share were $0.50.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, "In Mexico, the conditions prevailing in last two quarters of 2018, continued into the first quarter of this year. In general, we saw sluggish demand conditions that kept prices down for most of the quarter. Furthermore, strong results in 1Q18 made it a very challenging to compare with.

In the US market, we observed also relatively low prices for most of 1Q19, with an improvement towards the end of the quarter.  

Prices of our main raw material were stable in USD terms but, volatility in the Mexican peso exchange rate vs the US dollar, did not allow us to completely capture this benefit.  Our SG&A continued to be mainly affected by energy prices in Mexico.

Volume of our main product segments continued growing, but lower prices, mainly in poultry, led us to a decrease of 6.4% in total sales for 1Q19 when compared to the same quarter of 2018.

For 1Q19, we reached an EBITDA of $654.9 for a 4.6% margin.  This EBITDA represents an important decrease when compared with the 1Q18. Earnings per basic and diluted shares were $0.50 for the 1Q19.

The Company remained in a healthy financial condition as we reached a net cash level of $12,434.7 million, which will allow us to continue to support our growth plans.

We will remain focused on continuous improvements and efficiencies across all of our processes and working close to our customers"

Executive Summary
The following financial information is expressed in millions of nominal pesos, except for amounts per share and per ADR, with comparative figures for the same periods of 2018.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY





In millions of pesos


1Q19

1Q18

Change



$

$

$

%

Net sales


14,323.6

15,303.0

(979.4)

(6.4)

Net sales in Mexico


10,311.3

11,091.5

(780.1)

(7.0)

Net sales in the U.S.


4,012.3

4,211.5

(199.2)

(4.7)

 

NET SALES BY SEGMENT





In millions of pesos


1Q19

1Q18

Change



$

$

$

%

Net sales


14,323.6

15,303.0

(979.4)

(6.4)

Poultry


12,852.8

13,774.5

(921.7)

(6.7)

Other


1,470.8

1,528.4

(57.6)

(3.8)

 

NET VOLUME SOLD BY SEGMENT




In tons



Change


1Q19

1Q18

Volume

%

Total sales volume:

553,175

546,750

6,425

1.2

Poultry

425,745

422,181

3,564

0.8

Others

127,430

124,569

2,861.3

2.3

 

In 1Q19, the Company's net sales totaled $14,323.6 million; $979.4 million or 6.4% less than $15,303.0 million reported in 1Q18.  This was a result of price decreases in our main product lines.

In 1Q19, sales of our U.S. operations represented 28.0% of our total sales compared with 27.5% in 1Q18.

GROSS PROFIT





In millions of pesos


1Q19

1Q18

Change



$

$

$

%

Cost of sales


12,515.7

12,085.8

429.9

3.6

Gross profit


1,807.9

3,217.2

(1,409.3)

(43.8)

Gross margin


12.6%

21.0%

-

-

 

The cost of sales totaled $12,515.7 million, representing $429.9 million or 3.6% higher than $12,085.8 million reported in the same period of 2018. This increase was a result of more volume sold, and an increase in our feed costs expressed in Mexican pesos.  

The Company's gross profit in 1Q19 was $1,807.9 million, with a gross margin of 12.6%. This result is lower when compared to a gross profit of $3,217.2 million and a gross margin of 21.0% reported in 1Q18.

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