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Industrias Bachoco Announces Third Quarter 2019 Results

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CELAYA, Mexico, Oct. 23, 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 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 m

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