INDUSTRIAS BACHOCO, S.A.B. DE C.V. CELAYA, Mexico, July 26, 2017 /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 ("2Q17") and first half ("1H17") 2017 ended June 30, 2017. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS 2017
-- Net sales increased 13.1% in 2Q17.
-- EBITDA margin was 17.2% for 2Q17.
-- Earnings per basic and diluted share totaled $2.87 for 2Q17.
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This second quarter was in line with the seasonal behavior for the poultry industry. We continue observing good levels of demand in the Mexican and in the US markets and a normalized growth rate in the supply in both markets in which we participate, resulting in a balance between supply and demand.
"An increase in price and volume in our main product lines allowed us to increase our total sales by 13.1% in the quarter, when compared to the same period of 2016.
"At the end of the quarter, we were able to reach an EBITDA of $2,596.8 million, 11.5% higher than the EBITDA of the same quarter of 2016. Our EBITDA margin for 2Q17 was 17.2% and our earnings per basic and diluted share for 2Q17 was $2.87.
"We continued investing in the growth of our Company. Our CAPEX reached $1,092.9 million and our financial structure continued strengthening as we end with a net cash of $13,056.3 millions."
RECENT DEVELOPMENTS
On July 12th, 2017, the company announced the acquisition of "La Perla" a Pet Food company located in the Mexican state of Queretaro. This operation has a capacity to produce over 65,000 tons a year of dry pet food and also comprise a facility for producing Pet Food Treats.
On July 17th, 2017, the company announced the acquisition of "Albertville Quality Foods (AQF)" a further processing company located in Alabama USA. AQF produces and sells value added further processed products, with sales of around $270 million USD a year.
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 2016.
QUARTERLY RESULTS
NET SALES BY
GEOGRAPHY
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Net Sales 15,116.3 13,362.1 1,754.2 13.1
--------- -------- -------- ------- ----
Net sales in Mexico 11,386.6 10,115.5 1,271.1 12.6
------------------- -------- -------- ------- ----
Net sales in the
U.S. 3,729.7 3,246.6 483.1 14.9
---------------- ------- ------- ----- ----
NET SALES BY SEGMENT
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Net Sales 15,116.3 13,362.1 1,754.2 13.1
--------- -------- -------- ------- ----
Poultry 13,662.8 12,067.7 1,595.0 13.2
------- -------- -------- ------- ----
Other 1,453.5 1,294.4 159.2 12.3
----- ------- ------- ----- ----
NET VOLUME SOLD BY
SEGMENT
In tons Change
------
2Q17 2Q16 Volume %
---- ---- ------ ---
Total sales volume: 545,600 524,083 21,517 4.11
------------------- ------- ------- ------ ----
Poultry 420,604 403,217 17,388 4.31
------- ------- ------- ------ ----
Others 124,996 120,867 4,129 3.42
------ ------- ------- ----- ----
The Company's 2Q17 net sales totaled $15,116.3 million, $1,754.2 million or 13.1% more than $13,362.1 million reported in 2Q16. The increase is a result of more volume sold and price recovery in our main product lines.
In 2Q17, sales of our U.S. operations represented 24.7% of our total sales compared to 24.3% in 2Q16.
GROSS PROFIT
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Cost of sales 11,502.1 10,079.1 1,423.0 14.1
------------- -------- -------- ------- ----
Gross profit 3,614.2 3,283.0 331.2 10.1
------------ ------- ------- ----- ----
Gross margin 23.9% 24.6% - -
------------ ---- ---- --- ---
In 2Q17, cost of sales was $11,502.1 million; $1,423.0 million or 14.1% higher than $10,079.1 million reported in 2Q16. This increase was due to higher volume sold and higher raw material costs in Mexican peso terms, in part due to depreciation of the Mexican peso versus the US dollar.
The Company´s gross profit in 2Q17 was $3,614.2 million, 10.1% higher than the gross profit of $3,283.0 million in 2Q16, with a gross margin of 23.9% for 2Q17 vs 24.6% in 2Q16.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
("SG&A")
In
millions
of
pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Total
SG&A 1,297.6 1,185.0 112.7 9.5
----- ------- ------- ----- ---
Total SG&A expenses in 2Q17 were $1,297.6 million; $112.7 million higher than the $1,185.0 million reported in 2Q16. Total SG&A expenses as a percentage of net sales represented 8.6% in 2Q17 and 8.9% in 2Q16.
OTHER INCOME (EXPENSE), NET
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Other income (expense), net 13.4 (6.4) 19.9 (308.7)
--------------------------- ---- ---- ---- ------
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 2Q17, we recorded other income of $13.4 million, compared with other expense of $6.4 million reported in 2Q16.
OPERATING INCOME
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Operating income 2,330.0 2,091.6 238.4 11.4
---------------- ------- ------- ----- ----
Operating margin 15.4% 15.7% - -
---------------- ---- ---- --- ---
Operating income in 2Q17 totaled $2,330.0 million; $238.4 higher than $2,091.6 million reported in 2Q16. This represents an operating margin of 15.4% for 2Q17, slightly lower when compared to the same period of 2016. The increase in operating income is mainly attributed to higher gross income in 2Q17.
NET FINANCIAL INCOME
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Net Financial Income 96.8 197.3 (100.5) (50.9)
-------------------- ---- ----- ------ -----
Financial Income 254.3 244.9 9.4 3.8
---------------- ----- ----- --- ---
Financial Expense 157.5 47.6 109.9 230.9
----------------- ----- ---- ----- -----
In 2Q17, the Company reported net financial income of $96.8 million, compared to $197.3 million reported in the same period of 2016. The decrease is mainly attributed to lower exchange rate gains, as the peso strengthened during the quarter.
TAXES FOR THE PERIOD
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Total Taxes 703.9 708.9 (4.9) (0.7)
----------- ----- ----- ---- ----
Income tax 546.1 547.1 (1.0) (0.2)
---------- ----- ----- ---- ----
Deferred income tax 157.8 161.8 (3.9) (2.4)
------------------- ----- ----- ---- ----
Total taxes for the 2Q17 were $703.9 million, compared with total taxes of $708.9 million in the same period of 2016.
NET INCOME
In millions of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Net income 1,722.8 1,580.0 142.8 9.0
---------- ------- ------- ----- ---
Net margin 11.4% 11.8% - -
---------- ---- ---- --- ---
Basic and diluted
earnings per
share(1) 2.87 2.63 0.2 n/a
----------------- ---- ---- --- ---
Basic and diluted
earnings per ADR(2) 34.43 31.55 2.9 n/a
-------------------- ----- ----- --- ---
Weighted average
Shares
outstanding(3) 600,000 599,946 - -
---------------- ------- ------- --- ---
(1) In pesos
(2) in pesos, one ADR equals to twelve shares
(3) In thousands of shares
The net income for 2Q17 was $1,722.8 million, representing a basic and diluted income of $2.87 pesos per share, compared with a net income of $1,580.0 million, which represented $2.63 pesos of net income per share in 2Q16.This increase is mainly attributed to better operating and financial results. Net margin in 2Q17 was 11.4% compared to 11.8% reported in 2Q16.
EBITDA
In millions
of pesos 2Q17 2Q16 Change
------
$ $ $ %
--- --- --- ---
Net income 1,721.4 1,577.2 144.2 9.1
---------- ------- ------- ----- ---
Income tax
expense
(benefit) 703.9 708.9 (4.9) (0.7)
---------- ----- ----- ---- ----
Result in
associates 1.5 2.8 (1.4) (48.7)
----------- --- --- ---- -----
Net finance
(income)
expense (96.8) (197.3) 100.5 (50.9)
----------- ----- ------ ----- -----
Depreciation
and
amortization 266.8 238.0 28.8 12.1
------------- ----- ----- ---- ----
EBITDA 2,596.8 2,329.6 267.2 11.5
------ ------- ------- ----- ----
EBITDA
Margin (%) 17.2% 17.4% - -
----------- ---- ---- --- ---
Net revenues 15,116.3 13,362.1 1,754.2 13.1
------------ -------- -------- ------- ----
EBITDA in 2Q17 reached $2,596.8 million, representing an EBITDA margin of 17.2%, compared to an EBITDA of $2,329.6 million in 2Q16, with an EBITDA margin of 17.4%.
ACCUMULATED RESULTS
NET SALES BY
GEOGRAPHY
In millions of
pesos 1H17 1H16 Change
------
$ $ $ %
--- --- --- ---
Net Sales 28,801.2 25,201.5 3,599.7 14.3
--------- -------- -------- ------- ----
Net sales in
Mexico 21,335.9 18,937.1 2,398.9 12.7
------------ -------- -------- ------- ----
Net sales in the
U.S. 7,465.3 6,264.4 1,200.9 19.2
---------------- ------- ------- ------- ----
NET SALES BY SEGMENT
In millions of pesos 1H17 1H16 Change
------
$ $ $ %
--- --- --- ---
Net Sales 28,801.2 25,201.5 3,599.7 14.3
--------- -------- -------- ------- ----
Poultry 25,949.4 22,712.2 3,237.1 14.3
------- -------- -------- ------- ----
Other 2,851.8 2,489.2 362.6 14.6
----- ------- ------- ----- ----
NET VOLUME SOLD
BY SEGMENT
In metric tons Change
1H17 1H16 Volume %
---- ---- ------ ---
Total sales
volume: 1,073,699 1,045,501 28,198 2.70
----------- --------- --------- ------ ----
Poultry 839,823 814,676 25,147 3.09
------- ------- ------- ------ ----
Others 233,876 230,825 3,051 1.32
------ ------- ------- ----- ----
During the first half of 2017, net sales totaled $28,801.2 million; $3,599.7 million or 14.3% more than $25,201.5 million reported in the same period of 2016. The increase in sales is mainly attributable to higher volume sold and price recovery in our main product lines as compared with the first half of 2016.
In 1H17, sales of our U.S. operations represented 25.9% of our total sales, compared with 24.9% in 1H16.
OPERATING RESULTS
In millions of pesos 1H17 1H16 Change
------
$ $ $ %
--- --- --- ---
Cost of Sales 22,995.4 20,091.3 2,904.1 14.5
------------- -------- -------- ------- ----
Gross Profit 5,805.8 5,110.2 695.6 13.6
------------ ------- ------- ----- ----
Total SG&A 2,558.9 2,306.8 252.1 10.9
---------- ------- ------- ----- ----
Other Income (expense) 12.9 (15.5) 28.4 (183.0)
--------------------- ---- ----- ---- ------
Operating Income 3,259.8 2,787.9 471.9 16.9
---------------- ------- ------- ----- ----
Net Financial Income 27.0 333.7 (306.7) (91.9)
-------------------- ---- ----- ------ -----
Income Tax 911.2 944.7 (33.5) (3.6)
---------- ----- ----- ----- ----
Net Income 2,375.7 2,176.9 198.8 9.1
---------- ------- ------- ----- ---
In 1H17, the cost of sales totaled $22,995.4 million; $2,904.1 million or 14.5% higher than $20,091.3 million reported in 1H16. The increase in cost of sales is mainly attributed to higher volume sold and higher raw material costs in Mexican peso terms when compared to the same period of 2016.
As a result, we reached a gross profit of $5,805.8 million and a gross margin of 20.2% in 1H17, when compare to $5,110.2 million of gross profit and a margin of 20.3% reached in the same period of 2016.
Total SG&A expenses in 1H17 were $2,558.9 million; $252.1 million or 10.9% more than the $2,306.8 million reported in 1H16. In 1H17 total SG&A expenses as a percentage of net sales represented 8.9% compare with 9.2% in 1H16. This increase is mainly attributed to higher volume sold.
In 1H17 we had other income of $12.9 million, compared with other expenses of $15.5 million reported in 1H16.
The operating income in 1H17 was $3,259.8 million, which represents an operating margin of 11.3%, an increase of 16.9% from an operating income of $2,787.9 million and an operating margin of 11.1% in 1H16.
The net financial income in 1H17 was $27.0 million, lower when compared to a net financial income of $333.7 million in 1H16, mainly attributed to exchange rate losses as the Mexican peso recovered vs the US dollar during the semester.
Total taxes were $911.2 million as of June 30, 2017. These taxes include $677.3 million of income tax and $233.8 million of deferred income taxes. This figure compares to total taxes of $944.7 million in 1H16; the decrease was due to lower income before taxes.
All the above resulted in a net income of $2,375.7 million or 8.2% of net margin in the 1H17, which represents $3.96 pesos of earnings per share, while in the 1H16 the net income totaled $2,176.9 million, 8.6% of net margin and $3.62 pesos of net income per share.
EBITDA
In millions
of pesos 1H17 1H16 Change
------
$ $ $ %
--- --- --- ---
Net
controlling
interest
profit 2,373.5 2,172.4 201.1 9.3
------------ ------- ------- ----- ---
Income tax
expense
(benefit) 911.2 944.7 (33.5) (3.6)
---------- ----- ----- ----- ----
Result in
associates 2.2 4.6 (2.4) (51.8)
----------- --- --- ---- -----
Net finance
(income)
expense (27.0) (333.7) 306.7 (91.9)
----------- ----- ------ ----- -----
Depreciation
and
amortization 535.3 462.8 72.5 15.7
------------- ----- ----- ---- ----
EBITDA 3,795.1 3,250.7 544.4 16.7
------ ------- ------- ----- ----
EBITDA
Margin (%) 13.2% 12.9% - -
----------- ---- ---- --- ---
Net revenues 28,801.2 25,201.5 3,599.7 14.3
------------ -------- -------- ------- ----
EBITDA in 1H17 reached $3,795.1 million, representing an EBITDA margin of 13.2%, compared to EBITDA of $3,250.7 million in 1H16, with an EBITDA margin of 12.9%.
BALANCE SHEET
BALANCE
SHEET
DATA
In
millions
of pesos June 30, 2017 Dec. 31, 2016 Change
------
$ $ $ %
--- --- --- ---
TOTAL
ASSETS 46,597.0 45,090.5 1,506.6 3.3
------- -------- -------- ------- ---
Cash and
cash
equivalents 16,815.0 15,651.5 1,163.5 7.4
------------ -------- -------- ------- ---
Accounts
receivable 2,817.7 3,778.0 (960.3) (25.4)
----------- ------- ------- ------ -----
TOTAL
LIABILITIES 13,865.3 13,374.3 491.0 3.7
------------ -------- -------- ----- ---
Accounts
payable 4,183.6 3,836.4 347.2 9.1
-------- ------- ------- ----- ---
Short-
term debt 3,657.2 3,097.5 559.7 18.1
---------- ------- ------- ----- ----
Long-term
debt 101.5 950.4 (848.9) (89.3)
--------- ----- ----- ------ -----
TOTAL
STOCKHOLDERS'
EQUITY 32,731.7 31,716.2 1,015.5 3.2
-------------- -------- -------- ------- ---
Capital
stock 1,174.4 1,174.4 - -
------- ------- ------- --- ---
Cash and equivalents as of June 30, 2017 totaled $16,815.0 million vs $15,651.5 million as of December 31, 2016.
Total debt as of June 30, 2017 was $3,758.7 million, compared to $4,047.9 million reported as of December 31, 2016, mainly as a result of lower short-term bank debt.
Net cash as of June 30, 2017 was $13,056.3 million, compared to net cash of $11,603.6 million as of December 31, 2016.
CAPITAL EXPENDITURES
In millions of pesos 1H17 1H16 Change
------
$ $ $ %
--- --- --- ---
Capital Expenditures 1,092.9 1,188.2 (95.3) (8.0)
-------------------- ------- ------- ----- ----
Total CAPEX for the 1H17 was $1,092.9 million and $1,188.2 million in 1H16, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION
-----------------
As of June 30, 2016
-------------------
Total Shares 600,000,000
------------ -----------
Total free float 26.75%
---------------- -----
Market cap (millions of pesos) $52,044
----------------------------- -------
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-
17 86.79 84.44 86.74 57.98 54.75 57.98
---- ----- ----- ----- ----- ----- -----
May-
17 86.98 83.69 85.28 56.43 52.81 55.00
---- ----- ----- ----- ----- ----- -----
Apr-
17 86.30 82.53 84.02 54.97 52.06 53.45
---- ----- ----- ----- ----- ----- -----
Mar-
17 85.84 80.23 84.97 54.55 48.32 54.24
---- ----- ----- ----- ----- ----- -----
Feb-
17 83.53 79.53 80.08 49.08 46.20 47.88
---- ----- ----- ----- ----- ----- -----
Jan-
17 87.48 80.47 80.98 49.02 46.42 46.43
---- ----- ----- ----- ----- ----- -----
ANALYST COVERAGE
Institution Analyst name E-mail
----------- ------------ ------
ACTINVER José Antonio Cebeira jcebeira@actinver.com.mx
-------- -------------------- ------------------------
BBVA BANCOMER Miguel Ulloa miguel.ulloa@bbva.com
------------- ------------ ---------------------
GBM Miguel Mayorga mmayorga@gbm.com.mx
--- -------------- -------------------
INTERACCIONES CASA DE BOLSA Martin Lara mlarap@interacciones.com
--------------------------- ----------- ------------------------
JPMORGAN Pedro Leduc pedro.a.leduc@jpmorgan.com
-------- ----------- --------------------------
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $18.14 per USD $1.0, which corresponds to the rate at the close of June 30, 2017, 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 2017 2017 2016*
-------- ---- ---- ----
TOTAL
ASSETS $2,568.7 46,597.0 45,090.5
======== ======== ========
Total
current
assets 1,561.7 28,329.0 26,930.4
------- -------- --------
Cash and
cash
equivalents 927.0 16,815.0 15,651.5
Total
accounts
receivable 155.3 2,817.7 3,778.0
Inventories 352.6 6,396.6 5,931.9
Other
current
assets 126.8 2,299.7 1,569.0
Total non
current
assets 1,007.1 18,268.0 18,160.1
------- -------- --------
Net
property,
plant
and
equipment 842.2 15,277.1 15,081.1
Other non
current
Assets 164.9 2,991.0 3,079.0
TOTAL
LIABILITIES $764.4 13,865.3 13,374.3
====== ======== ========
Total
current
liabilities 525.6 9,533.9 8,316.3
----- ------- -------
Notes
payable
to banks 201.6 3,657.2 3,097.5
Accounts
payable 230.6 4,183.6 3,836.4
Other
taxes
payable
and
other
accruals 93.3 1,693.1 1,382.4
Total
long-
term
liabilities 238.8 4,331.4 5,058.0
----- ------- -------
Long-
term
debt 5.6 101.5 950.4
Other
non
current
liabilities 11.7 212.4 195.0
Deferred
income
taxes 221.5 4,017.5 3,912.6
TOTAL
STOCKHOLDERS'
EQUITY $1,804.4 32,731.7 31,716.2
======== ======== ========
Capital
stock 64.7 1,174.4 1,174.4
Commission
in
shares
issued 22.8 414.4 414.4
Repurchased
shares - - -
Retained
earnings 1,669.7 30,288.1 28,694.6
Others
accounts 44.0 798.7 1,378.9
Non
controlling
interest 3.1 56.1 53.9
TOTAL
LIABILITIES
AND
STOCKHOLDERS'
EQUITY $2,568.7 46,597.0 45,090.5
======== ======== ========
*Audited
CONSOLIDATED STATEMENT OF INCOME
Second Quarter Results, ended June 30:
-Unaudited-
U.S. Dollar
In millions pesos 2017 2017 2016
----------------- ---- ---- ----
Net sales $833.3 15,116.3 13,362.1
Cost of sales 634.1 11,502.1 10,079.1
----- -------- --------
Gross profit 199.2 3,614.2 3,283.0
SG&A 71.5 1,297.6 1,185.0
Other income
(expenses), net 0.7 13.4 (6.4)
--- ---- ----
Operating income 128.4 2,330.0 2,091.6
Net finance income 5.3 96.8 197.3
Income tax 38.8 703.9 708.9
---- ----- -----
Net Income $95.0 1,722.8 1,580.0
===== ======= =======
Non-controlling
interest 0.08 1.5 2.8
Net controlling
interest profit 94.9 1,721.4 1,577.2
Basic and diluted
earnings per share 0.16 2.87 2.63
Basic and diluted
earnings per ADR 1.90 34.43 31.55
Weighted average
Shares
outstanding(1) 600,000 600,000 599,946
EBITDA Result $143.2 2,596.8 2,329.6
====== ======= =======
Gross margin 23.9% 23.9% 24.6%
Operating margin 15.4% 15.4% 15.7%
Net margin 11.4% 11.4% 11.8%
EBITDA margin 17.2% 17.2% 17.4%
(1)In thousands
* Audited
CONSOLIDATED STATEMENT OF INCOME
Accumulated results, for the six months ended June 30.
-Unaudited-
U.S. Dollar
In millions pesos 2017 2017 2016
----------------- ---- ---- ----
Net sales $1,587.7 28,801.2 25,201.5
Cost of sales 1,267.7 22,995.4 20,091.3
------- -------- --------
Gross profit 320.1 5,805.8 5,110.2
Selling, general and
administrative
expenses 141.1 2,558.9 2,306.8
Other income
(expenses), net 0.7 12.9 (15.5)
--- ---- -----
Operating income 179.7 3,259.8 2,787.9
Net finance income 1.5 27.0 333.7
Income tax 50.2 911.2 944.7
---- ----- -----
Net income $182.7 2,375.7 2,176.9
====== ======= =======
Non-controlling
interest 0.1 2.2 4.6
Net controlling
interest profit 131.1 2,373.5 2,172.4
Basic and diluted
earnings per share 0.22 3.96 3.62
Basic and diluted
earnings per ADR 2.62 47.5 43.45
Weighted average
Shares
outstanding(1) 599,973 599,973 599,959
EBITDA Result $209.2 3,795.1 3,250.7
====== ======= =======
Gross margin 20.2% 20.2% 20.3%
Operating margin 11.3% 11.3% 11.1%
Net margin 8.3% 8.2% 8.6%
EBITDA margin 13.2% 13.2% 12.9%
(1)In thousands
*Audited
CONSOLIDATED STATEMENT OF CASH FLOWS
In million of
pesos
-Unaudited-
U.S. Dollar June 30,
--------
2017 2017 2016
---- ---- ----
NET MAJORITY
INCOME BEFORE
INCOME TAX $181.2 3,286.9 3,121.6
------ ------- -------
ITEMS RELATING
TO INVESTING
ACTIVITIES: 19.5 354.0 229.6
---- ----- -----
Depreciation
and others 29.5 535.3 462.8
Income (loss)
on sale of
plant and
equipment 0.6 11.6 14.1
Other Items (10.6) (192.9) (247.3)
NET CASH
GENERATED
FROM NET
INCOME BEFORE
TAXES 200.7 3,640.8 3,351.2
----- ------- -------
CASH GENERATED
OR USED IN
THE
OPERATION: (36.9) (669.5) (2,130.3)
Decrease
(increase) in
accounts
receivable 26.0 472.0 (934.4)
Decrease
(increase) in
inventories (30.0) (543.5) (469.0)
Increase
(decrease) in
accounts
payable (1.5) (27.6) (503.7)
Increase
(decrease) in
other
liabilities (31.4) (570.3) (223.2)
NET CASH FLOW
FROM
OPERATING
ACTIVITIES 163.8 2,971.4 1,220.9
----- ------- -------
NET CASH FLOW
FROM
INVESTING
ACTIVITIES (29.0) (526.2) (743.8)
----- ------ ------
Acquisition of
property,
plant and
equipment (60.2) (1,092.9) (1,188.2)
Proceeds from
sales of
property
plant and
equipment 1.0 18.9 16.0
Other Items 30.2 547.8 428.4
CASH FLOW
SURPLUS
(REQUIREMENTS
OF) TO BE
USED IN
FINANCING
ACTIVITIES 134.8 2,445.2 477.1
----- ------- -----
Net cash
provided by
financing
activities: (70.7) (1,281.7) (523.0)
----- -------- ------
Proceeds from
loans 140.0 2,539.6 1,804.0
Principal
payments on
loans (145.9) (2,646.8) (2,055.0)
Dividends paid (21.5) (390.0) (390.0)
Other items (43.2) (784.5) 118.0
Net increase
(decrease) in
cash and
equivalents 64.1 1,163.5 (45.9)
Cash and
investments
at the
beginning of
year $862.8 15,651.5 15,288.9
------ -------- --------
CASH AND
INVESTMENTS
AT END OF
PERIOD $927.0 16,815.0 15,243.0
====== ======== ========
DERIVATIVES POSITION REPORT
Second Quarter 2017
Thousands of Mexican Pesos, as of June 30, 2017 ANEXO 1
TYPE OF FINANCIAL OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE GUARANTIES
INSTRUMENT BY YEAR REQUIRED
---------- --- ------- --------
2Q-2017 1Q-2017 2Q-2017 1Q-2017
------- ------- ------- -------
Forward Vanilla and Hedge $1,380,160 $18.14 $18.73 $-122,590 $-146,878 in 2017 The deals
consider the
KOT Forwards possibility of
margin calls but
not another kind
of guarantee
--- --- ------------
Futures for corn and Hedge $137,970 CORN CORN $8 -$ 3,601 83% in 2017
soybean meal and 17% in
2018
---
In USD per Bushel In USD per Bushel
----------------- -----------------
month price month price
----- ----- ----- -----
Sep-17 $3.810 May-17 $3.643
Dec-17 $3.920 Jul-17 $3.718
Mar-18 $4.013 Sep-17 $3.793
Jul-18 $4.125
Sep-18 $4.103
Dec-18 $4.135
SOYBEAN MEAL SOYBEAN MEAL
In USD per ton In USD per ton
-------------- --------------
month price month price
----- ----- ----- -----
Aug-17 $306.2 May-17 $308.4
Sep-17 $307.9 Jul-17 $311.8
Oct-17 $309.3 Aug-17 $312.3
Dec-17 $311.2 Sep-17 $312.4
Oct-17 $311.4
Options of Corn Hedge $176,631 CORN CORN $1,908 $ - in 2017 and
2018
---
In USD per Bushel In USD per Bushel
----------------- -----------------
month price month price
----- ----- ----- -----
Sep-17 $3.810
Dec-17 $3.920
Jan-18 $4.013
Options of soybean Hedge $177,029 SOYBEAN MEAL SOYBEAN MEAL -$ 2,473 -$ 70 in 2017 and
meal 2018
---- --- ----
In USD per ton In USD per ton
-------------- --------------
month price month price
----- ----- ----- -----
Aug-17 $306.2
Sep-17 $307.9 May-17 $308.4
Oct-17 $309.3
Dec-17 $311.2
Jan-18 $312.5
Mar-18 $312.7
-The total financial instruments do not exceed 5% of total assets as of June 30, 2017.
-The notional value represents the net position as of June 30, 2017 at the exchange rate of Ps. 18.14 per one dolar.
-A negative value means an unfavorable effect for the Company.
PROBABLE SCENARIO
Second Quarter 2017
Thousands of Mexican Pesos, as of June 30, 2017 PROBABLE SCENARIO
TYPE OF FINANCIAL REASONABLE VALUE OF THE RELATED COMMODITY EFFECT ON THE EFFECT ON THE CASH FLOW(3)
INSTRUMENT VALUE INCOME STATEMENT
---------- ----- ----------------
Reference Value
---------------
-2.5% 2.5% 5.0% -2.5% 2.5% 5.0%
---- --- --- ---- --- ---
Forwards Vanilla -$ 122,590 $17.69 $18.59 $19.05 Direct -$157,094 -$88,086 -$ 58,117
---------------- --------------------------- ------ ------ ------ ------ --------- -------- ----------
-5% 5% 10% -5% 5% 10%
Futures of Corn: (2) $8 $3.620 $4.001 $4.191 The effect will -$ 6,891 $6,906 $13,805
materialize as the
inventory is consumed
Futures of Soybean Meal: (2) $290.9 $321.5 $336.8
--------------------------- ------ ------ ------
Options for Corn $1,908 $3.620 $4.001 $4.191 $32,025 $10,358 $18,931
---------------- ------ ------ ------ ------ ------- ------- -------
Options of Soybean Meal -$ 2,473 $290.9 $321.5 $336.8 -$ 11,325 $6,378 $15,230
----------------------- ----------------------------- ------ ------ ------ ---------- ------ -------
(1) The reference value is the exchange rate of Ps. $18.14 per USD as of June 30, 2017.
(2) The reference values are; the future of corn for Sep 2017, $3.810 USD/bushel and the future of soybeanmeal for August 2017, $306.20 USD/ton.
All the evaluations are performed according with the corresponding future, here only the first month futures are shown.
(3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown.
-A negative value means an unfavorable effect for the Company.
Second Quarter 2017
Thousands of Mexican Pesos, as of June 30, 2017 STRESS SCENARIO
TYPE OF FINANCIAL REASONABLE VALUE OF THE RELATED COMMODITY EFFECT ON THE EFFECT ON THE CASH FLOW
INSTRUMENT VALUE INCOME
STATEMENT
--- ---------
Reference Value
---------------
-50% -25% 25% 50% -50% -25% 25% 50%
--- --- --- --- --- --- --- ---
Forward Vanilla and KOT -$ 122,590 $9.07 $13.61 $22.68 $27.21 Direct -$812,670 -$467,630 $199,775 $522,140
Forwards
--------
CONFERENCE CALL INFORMATION
The Company will host its second quarter 2017 earnings call, on Thursday, July 27, 2017. 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:
https://www.conferenceplus.com/AlternateNumbers/alternatenumbers.aspx?100875&t=P&o=UQieChXZoqyKEn
Confirmation Number: 45293719
Visit the following link to access the webcast: http://event.onlineseminarsolutions.com/wcc/r/1466635-1/911A257CD20D8763878FFEB3E50C277F?partnerref=rss-events
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 25,000 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.
View original content:http://www.prnewswire.com/news-releases/industrias-bachoco-announces-second-quarter-2017-results-300494155.html
SOURCE Industrias Bachoco, S.A.B. de C.V.
