INDUSTRIAS BACHOCO, S.A.B. DE C.V. CELAYA, Mexico, Oct. 26, 2016 /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 ("3Q16") and accumulated ("9M16") 2016 results ending September 30, 2016. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS- 2016 vs. 2015
-- Net sales increased 11.3% in 3Q16.
-- EBITDA margin was 9.8% for 3Q16.
-- Earnings per basic and diluted share totaled $1.35 for 3Q16.
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated "For the quarter, in México we continued with a high level of volatility regarding the exchange rate of the Mexican peso, while the economy continued growing, and the inflation rate was kept relatively low.
In México, we observed a normal supply in the poultry industry and as it is typical for the third quarter, lower prices. On the other hand, we continued with good demand levels.
In the U.S. industry, we observed weaker prices when compared with the same period of 2015, even when many countries have lifted their trade restrictions on US exports.
The table egg industry in both countries are under conditions of oversupply and low prices for the quarter.
For Bachoco, we were able to increase our total sales and volume in our main product lines. We continue improving our sales mix in our U.S. operation, as we increase our further process products and reduce our exposure to the commodities market. Overall, we reached an increase in total sales of 11.3% when compared to 3Q15.
The depreciation of the Mexican peso continued affecting raw material cost, and consequently our total cost of sales, as it occurred in the 1H16.
At the end, we reached an EBITDA of $1,233.0 million, slightly higher than the EBITDA of the same quarter of 2015. For the third quarter, our EBITDA margin was 9.8% and our earnings per basic and diluted share were $1.35.
We continued investing in the growth of our company, as our CAPEX reached $1,827.4 million for the year.
Our financial structure continued strengthening as we reached a net cash of $11,238.9 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 2015.
QUARTERLY RESULTS
NET SALES BY GEOGRAPHY
----------------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Net sales 12,612.3 11,335.6 1,276.6 11.3
--------- -------- -------- ------- ----
Net sales in Mexico 9,436.0 8,551.8 884.2 10.3
------------------- ------- ------- ----- ----
Net sales in the U.S. 3,176.2 2,783.8 392.4 14.1
--------------------- ------- ------- ----- ----
NET SALES BY SEGMENT
--------------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Net sales 12,612.3 11,335.6 1,276.6 11.3
--------- -------- -------- ------- ----
Poultry 11,348.1 10,252.4 1,095.7 10.7
------- -------- -------- ------- ----
Other 1,264.2 1,083.3 180.9 16.7
----- ------- ------- ----- ----
NET VOLUME SOLD BY SEGMENT
--------------------------
In tons Change
------
3Q16 3Q15 Volume %
---- ---- ------ ---
Total sales volume: 526,343 512,347 13,995 2.7
------------------- ------- ------- ------ ---
Poultry 411,710 403,185 8,525 2.1
------- ------- ------- ----- ---
Others 114,632 109,162 5,470 5.0
------ ------- ------- ----- ---
The Company's 3Q16 net sales totaled $12,612.3 million, $1,276.6 million or 11.3% more than $11,335.6 million reported in 3Q15. The increase is a result of more volume sold and price increases in Poultry and Others when compared to 3Q15.
In 3Q16, sales of our U.S. operations remained strong and represented 25.2% of our total sales; this compares with 24.6% it represented in 3Q15 of our total sales.
GROSS PROFIT
------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Cost of sales 10,657.9 9,195.4 1,462.5 15.9
------------- -------- ------- ------- ----
Gross profit 1,954.3 2,140.2 (185.9) (8.7)
------------ ------- ------- ------ ----
Gross margin 15.5% 18.9% - -
------------ ---- ---- --- ---
In 3Q16 the cost of sales totaled $10,657.9 million, $1,462.5 million or 15.9% higher than $9,195.4 million reported in 3Q15. The increase in cost of sales is mainly attributed to higher volume sold and higher raw material costs in Mexican peso terms.
The gross profit was $1,954.3 million with a gross margin of 15.5% in 3Q16. This profit is lower than the gross profit of $2,140.2 million and gross margin of 18.9% reported in 3Q15.
Selling, general and administrative expenses ("SG&A")
----------------------------------------------------
In
millions
of
pesos
3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Total
SG&A 1,219.2 1,088.9 130.3 12.0
----- ------- ------- ----- ----
Total SG&A expenses in 3Q16 were $1,219.2 million, $130.3 million or 12.0% more than the $1,088.9 million reported 3Q15. Total SG&A expenses as a percentage of net sales represented 9.7% in 3Q16 compared to 9.6% in 3Q15.
other income (expense), net
---------------------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Other income (expense),
net 257.4 (35.6) 293.0 (823.1)
----------------------- ----- ----- ----- ------
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 3Q16, we recorded other income of $257.4 million, compared with other expenses of $35.6 million reported in 3Q15. This quarter in particular, we were able to get an important gain on the sale of some unused assets.
OPERATING INCOME
----------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Operating income 992.5 1,015.8 (23.3) (2.3)
---------------- ----- ------- ----- ----
Operating margin 7.9% 9.0% - -
---------------- --- --- --- ---
Operating income in 3Q16 totaled $992.5 million with an operating margin of 7.9%, a decrease when compared to operating income of $1,015.8 million and a 9.0% operating margin reported in 3Q15.
The lower operating income is mainly attributed to lower gross profit, and higher SG&A's than in 3Q15.
NET FINANCIAL INCOME
--------------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Net Financial Income 136.2 92.4 43.9 47.5
-------------------- ----- ---- ---- ----
Financial Income 178.8 131.6 47.2 35.9
---------------- ----- ----- ---- ----
Financial Expense 42.6 39.2 3.4 8.6
----------------- ---- ---- --- ---
In 3Q16, the Company reported net financial income of $136.2 million, compared to income of $92.4 million reported in the same period of 2015, mainly due to higher interest income.
TAXES FOR THE PERIOD
--------------------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Total Taxes 319.1 321.8 (2.8) (0.9)
----------- ----- ----- ---- ----
Income tax 289.7 66.4 223.3 336.5
---------- ----- ---- ----- -----
Deferred income tax 29.3 255.5 (226.1) (88.5)
------------------- ---- ----- ------ -----
Total taxes for the 3Q16 were $319.1 million, compared with total taxes of $321.8 million in the same period of 2015.
NET INCOME
----------
In millions of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Net income 809.7 786.3 23.4 3.0
---------- ----- ----- ---- ---
Net margin 6.4% 6.9% - -
---------- --- --- --- ---
Basic and diluted income
per share(1) 1.35 1.31 - -
------------------------ ---- ---- --- ---
Basic and diluted income
per ADR(2) 16.18 15.69 - -
------------------------ ----- ----- --- ---
Weighted average Shares
outstanding(3) 600,000 599,548 - -
----------------------- ------- ------- --- ---
(1) In pesos
(2) in pesos, an ADR equal to twelve shares
(3) In thousands of shares
The net income for 3Q16 was $809.7 million, representing a basic and diluted income of $1.35 pesos per share, compared with a lower net income of $786.3 million, which represented $1.31 pesos of basic and diluted income per share in 3Q15. This income represents a net margin of 6.4% and 6.9% for 3Q16 and 3Q15, respectively.
EBITDA
------
In millions
of pesos 3Q16 3Q15 Change
------
$ $ $ %
--- --- --- ---
Net
controlling
interest
income 809.0 783.8 25.3 3.2
------------ ----- ----- ---- ---
Income tax
expense
(benefit) 319.1 321.8 (2.8) (0.9)
---------- ----- ----- ---- ----
Result in
associates 0.6 2.5 (1.9) (75.3)
----------- --- --- ---- -----
Net finance
(income)
expense (136.2) (92.4) (43.9) 47.5
----------- ------ ----- ----- ----
Depreciation
and
amortization 240.5 205.8 34.7 16.9
------------- ----- ----- ---- ----
EBITDA 1,233.0 1,221.5 11.5 0.9
------ ------- ------- ---- ---
EBITDA
Margin (%) 9.8% 10.8% - -
----------- --- ---- --- ---
Net sales 12,612.3 11,335.6 1,276.6 11.3
---------- -------- -------- ------- ----
EBITDA in 3Q16 reached $1,233.0 million, representing an EBITDA margin of 9.8%, compared to an EBITDA of $1,221.5 million in 3Q15, with an EBITDA margin of 10.8%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY
----------------------
In millions of pesos 9M16 9M15 Change
------
$ $ $ %
--- --- --- ---
Net Sales 37,813.7 34,578.8 3,234.9 9.4
--------- -------- -------- ------- ---
Net sales in Mexico 28,373.1 26,320.4 2,052.7 7.8
------------------- -------- -------- ------- ---
Net sales in the U.S. 9,440.6 8,258.4 1,182.2 14.3
--------------------- ------- ------- ------- ----
NET SALES BY SEGMENT
--------------------
In millions of pesos 9M16 9M15 Change
------
$ $ $ %
--- --- --- ---
Net Sales 37,813.7 34,578.8 3,234.9 9.4
--------- -------- -------- ------- ---
Poultry 34,060.3 31,369.5 2,690.8 8.6
------- -------- -------- ------- ---
Other 3,753.4 3,209.3 544.1 17.0
----- ------- ------- ----- ----
NET VOLUME SOLD BY SEGMENT
--------------------------
In tons Change
------
9M16 9M15 Volume %
---- ---- ------ ---
Total sales volume: 1,571,843 1,496,199 75,644 5.06
------------------- --------- --------- ------ ----
Poultry 1,226,386 1,183,627 42,759 3.61
------- --------- --------- ------ ----
Others 345,457 312,572 32,885 10.52
------ ------- ------- ------ -----
During the first 9M16, net sales totaled $37,813.7 million, $3,234.9 million or 9.4% more than the $34,578.8 million reported in the same period of 2015. The sales increase is mainly attributed to higher volume sold and higher prices in both poultry and others.
In 9M16, sales of our U.S. operations represented 25.0% of our total sales, compared with 23.9% in 9M15.
ACCUMULATED OPERATING
RESULTS
---------------------
In millions of pesos 9M16 9M15 Change
------
$ $ $ %
--- --- --- ---
Cost of Sales 30,749.2 26,832.0 3,917.2 14.6
------------- -------- -------- ------- ----
Gross Profit 7,064.5 7,746.8 (682.3) (8.8)
------------ ------- ------- ------ ----
Total SG&A 3,526.0 3,141.6 384.3 12.2
---------- ------- ------- ----- ----
Other Income (expense) 241.8 (43.8) 285.7 (651.8)
--------------------- ----- ----- ----- ------
Operating Income 3,780.4 4,561.4 (781.0) (17.1)
---------------- ------- ------- ------ -----
Net Financial Income 470.0 405.5 64.5 15.9
-------------------- ----- ----- ---- ----
Income Tax 1,263.8 1,520.4 (256.6) (16.9)
---------- ------- ------- ------ -----
Net Income 2,986.6 3,446.5 (459.9) (13.3)
---------- ------- ------- ------ -----
In 9M16 the cost of sales totaled $30,749.2 million, $3,917.2 million or 14.6% higher than the $26,832.0 million reported in 9M15. This increase is mainly attributed to higher volume sold and higher raw material costs in Mexican peso terms due to the depreciation of the Mexican peso vs the US dollar.
As a result, we reached a gross profit of $7,064.5 million and a gross margin of 18.7% in 9M16, which is slightly lower than $7,746.8 million of gross profit and a margin of 22.4% reached in the same period of 2015.
Total SG&A expenses in 9M16 were $3,526.0 million, $384.3 million or 12.2% more than the $3,141.6 million reported 9M15. Total SG&A expenses as a percentage of sales represented 9.3% in 9M16 compared to 9.1% in 9M15. This increase is mainly attributed to higher volume sold.
In 9M16 we had other income of $241.8 million, compared with other expenses of $43.8 million reported in 9M15.
The operating income in 9M16 was $3,780.4 million, which represents an operating margin of 10.0%, which is lower than the operating income of $4,561.4 million and an operating margin of 13.2% in 9M15.
The net financial income in 9M16 was $470.0 million, this was higher when compared to net financial income of $405.5 million in 9M15.
Total taxes were $1,263.8 million as of September 30, 2016. These taxes include $994.3 million of income tax and $269.5 million of deferred income taxes. This figure compares to total taxes of $1,520.4 million, which includes income taxes of $1,189.6 and $330.8 million of deferred income taxes in 9M15.
All the above result in a net income of $2,986.6 million or 7.9% of net margin for the 9M16, which represents $4.97 pesos of earnings per share. Meanwhile in the 9M15, the net income totaled $3,446.5 million, 10.0% of the net margin and $5.74 pesos of net income per share.
EBITDA
------
In millions
of pesos 9M16 9M15 Change
------
$ $ $ %
--- --- --- ---
Net
controlling
interest
profit 2,981.4 3,440.6 (459.2) (13.3)
------------ ------- ------- ------ -----
Income tax
expense
(benefit) 1,263.8 1,520.4 (256.6) (16.9)
---------- ------- ------- ------ -----
Result in
associates 5.2 5.9 (0.7) (11.8)
----------- --- --- ---- -----
Net finance
(income)
expense (470.0) (405.5) (64.5) 15.9
----------- ------ ------ ----- ----
Depreciation
and
amortization 703.3 602.7 100.6 16.7
------------- ----- ----- ----- ----
EBITDA 4,483.7 5,164.1 (680.4) (13.2)
------ ------- ------- ------ -----
EBITDA
Margin (%) 11.9% 14.9% - -
----------- ---- ---- --- ---
Net sales 37,813.7 34,578.8 3,234.9 9.4
---------- -------- -------- ------- ---
EBITDA in 9M16 reached $4,483.7 million, representing an EBITDA margin of 11.9%, compared to an EBITDA of $5,164.1 million in 9M15, with an EBITDA margin of 14.9%.
BALANCE SHEET
BALANCE SHEET
DATA
-------------
In millions
of pesos Sept, 2016 Dec. 31, 2015 Change
------
$ $ $ %
--- --- --- ---
TOTAL ASSETS 42,835.6 40,446.6 2,389.0 5.9
------------ -------- -------- ------- ---
Cash and cash
equivalents 15,285.7 15,288.9 (3.2) (0.0)
------------- -------- -------- ---- ----
Accounts
receivable 2,582.0 2,727.9 (146.0) (5.4)
----------- ------- ------- ------ ----
TOTAL
LIABILITIES 12,377.8 12,667.2 (289.4) (2.3)
------------ -------- -------- ------ ----
Accounts
payable 3,307.4 3,966.0 (658.7) (16.6)
-------- ------- ------- ------ -----
Short-term
debt 3,202.9 1,631.9 1,571.0 96.3
---------- ------- ------- ------- ----
Long-term
debt 843.9 2,495.1 (1,651.3) (66.2)
--------- ----- ------- -------- -----
TOTAL
STOCKHOLDERS'
EQUITY 30,457.8 27,779.4 2,678.4 9.6
-------------- -------- -------- ------- ---
Capital stock 1,174.4 1,174.4 0.0 0.0
------------- ------- ------- --- ---
Cash and equivalents as of September 30, 2016 totaled $15,285.7; practically the same level we had on December 31, 2015.
Total debt as of September 30, 2016 was $4,046.8 million, which is lower when compared to $4,127.0 million reported as of December 31, 2015.
Net cash as of September 30, 2016 was $11,238.9 million, which is higher when compared with a net cash of $11,161.9 million as of December 31, 2015.
CAPITAL EXPENDITURES
--------------------
In millions of pesos 9M16 9M15 Change
------
$ $ $ %
--- --- --- ---
Capital Expenditures 1,827.4 1,154.4 673.0 58.3
-------------------- ------- ------- ----- ----
Total CAPEX for the 9M16 was $1,827.4 million and $1,154.4 million in 9M15. This was primarily allocated towards organic growth and productivity projects across all of our facilities.
STOCK INFORMATION
As of September 30, 2016
------------------------
Total Shares 600,000,000
------------ -----------
Total free float 26.75%
---------------- -----
Market cap (millions
of pesos) $48,624
-------------------- -------
SHARE PRICE
-----------
Mexican Stock The New York Stock
Exchange Exchange
-------------- -------------------
Ticker Symbol:
Bachoco Ticker Symbol: IBA
In nominal pesos per In U.S. Dollar per
Share ADR
Month High Low Close High Low Close
---------------------- ---- --- ----- ---- --- -----
Sept-
16 84.24 76.92 81.04 54.14 47.29 50.16
Aug-
16 84.65 80.21 83.29 55.65 51.59 53.25
Jul-
16 82.86 77.65 81.33 53.82 50.36 52.02
Jun-
16 76.20 73.61 75.28 50.05 46.04 48.98
May-
16 77.31 70.42 75.85 51.46 46.60 49.55
Apr-
16 76.78 71.63 72.30 52.68 49.70 50.32
Mar-
16 77.40 73.05 73.91 53.52 49.11 51.28
Feb-
16 74.00 65.45 72.98 49.11 43.15 48.28
Jan-
16 70.40 62.51 65.45 48.67 41.17 43.32
---- ----- ----- ----- ----- ----- -----
Source: yahoo finances
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
JPMORGAN Pedro Leduc pedro.a.leduc@jpmorgan.com
SIGNUM RESEARCH Emma Ochoa Emma.ochoa@signumresearch.com
--------------- ---------- -----------------------------
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $19.38 per USD $1.00, which corresponds to the rate at the close of September 30, 2016, 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 September 30, December 31,
------------- ------------
In million pesos 2016 2016 2015*
---------------- ---- ---- ----
TOTAL ASSETS $2,210.3 42,835.6 40,446.6
======== ======== ========
Total current assets 1,300.7 25,208.4 24,722.0
------- -------- --------
Cash and cash equivalents 788.7 15,285.7 15,288.9
Total accounts receivable 133.2 2,582.0 2,727.9
Inventories 303.8 5,887.5 5,056.1
Other current assets 75.0 1,453.2 1,649.1
Total non current assets 909.6 17,627.3 15,724.6
----- -------- --------
Net property, plant and
equipment 751.4 14,562.5 13,188.1
Other non current Assets 158.1 3,064.8 2,536.5
TOTAL LIABILITIES $638.7 12,377.8 12,667.2
====== ======== ========
Total current liabilities 394.1 7,637.3 6,642.8
----- ------- -------
Notes payable to banks 165.3 3,202.9 1,631.9
Accounts payable 170.7 3,307.4 3,966.0
Other taxes payable and
other accruals 58.2 1,127.0 1,044.9
Total long-term liabilities 244.6 4,740.5 6,024.4
----- ------- -------
Long-term debt 43.5 843.9 2,495.1
Other non current
liabilities 9.5 184.6 160.2
Deferred income taxes 191.5 3,712.0 3,369.0
TOTAL STOCKHOLDERS' EQUITY $1,571.6 30,457.8 27,779.4
======== ======== ========
Capital stock 60.6 1,174.4 1,174.4
Commission in shares issued 21.4 414.4 414.0
Repurchased shares - - 0.7
Retained earnings 1,430.8 27,729.4 25,527.9
Others accounts 55.9 1,084.0 611.8
Non controlling interest 2.9 55.6 50.4
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,210.3 42,835.6 40,446.6
======== ======== ========
*Audited
CONSOLIDATED STATEMENT OF INCOME
Third Quarter Results, ended September
30:
-Unaudited-
U.S. Dollar
In millions pesos 2016 2016 2015
----------------- ---- ---- ----
Net sales $650.8 12,612.3 11,335.6
Cost of sales 549.9 10,657.9 9,195.4
----- -------- -------
Gross profit 100.8 1,954.3 2,140.2
SG&A 62.9 1,219.2 1,088.9
Other income (expenses), net 13.3 257.4 (35.6)
---- ----- -----
Operating income 51.2 992.5 1,015.8
Net finance income 7.0 136.2 92.4
Income tax 16.5 319.1 321.8
---- ----- -----
Net Income $41.8 809.7 786.3
----- ----- -----
Non-controlling interest 0.03 0.6 2.5
Net controlling interest profit 41.7 809.0 783.8
Basic and diluted earnings per share 0.07 1.35 1.31
Basic and diluted earnings per ADR 0.83 16.18 15.69
Weighted average Shares outstanding(1) 600,000 600,000 599,548
EBITDA Result $63.6 1,233.0 1,221.5
===== ======= =======
Gross margin 15.5% 15.5% 18.9%
Operating margin 7.9% 7.9% 9.0%
Net margin 6.4% 6.4% 6.9%
EBITDA margin 9.8% 9.8% 10.8%
(1)In thousands
CONSOLIDATED STATEMENT OF INCOME
Accumulated results, for the nine
months ended September 30.
-Unaudited-
U.S. Dollar
In millions pesos 2016 2016 2015
----------------- ---- ---- ----
Net sales $1,951.2 37,813.7 34,578.8
Cost of sales 1,586.6 30,749.2 26,832.0
------- -------- --------
Gross profit 364.5 7,064.5 7,746.8
Selling, general and
administrative expenses 181.9 3,526.0 3,141.6
Other income (expenses), net 12.5 241.8 (43.8)
---- ----- -----
Operating income 195.1 3,780.4 4,561.4
Net finance income 24.3 470.0 405.5
Income tax 65.2 1,263.8 1,520.4
---- ------- -------
Net income $243.6 2,986.6 3,446.5
====== ======= =======
Non-controlling interest 0.3 5.2 5.9
Net controlling interest profit 154.4 2,981.4 3,440.6
Basic and diluted earnings per
share 0.26 4.97 5.74
Basic and diluted earnings per
ADR 3.08 59.6 68.87
Weighted average Shares
outstanding(1) 599,973 599,973 599,508
EBITDA Result $231.4 4,483.7 5,164.1
====== ======= =======
Gross margin 18.7% 18.7% 22.4%
Operating margin 10.0% 10.0% 13.2%
Net margin 7.9% 7.9% 10.0%
EBITDA margin 11.9% 11.9% 14.9%
(1)In thousands
CONSOLIDATED
STATEMENT OF
CASH FLOWS
In million of
pesos
-Unaudited-
U.S. Dollar September 30,
-------------
2016 2016 2015
---- ---- ----
NET MAJORITY
INCOME BEFORE
INCOME TAX $219.3 4,250.4 4,966.9
------ ------- -------
ITEMS THAT DO
NOT REQUIRE
CASH: - - -
ITEMS RELATING
TO INVESTING
ACTIVITIES: 11.4 220.2 393.8
---- ----- -----
Depreciation
and others 36.3 703.3 602.7
Income (loss)
on sale of
plant and
equipment (7.0) (135.0) 36.1
Other Items (18.0) (348.0) (244.9)
ITEMS RELATING
TO FINANCING
ACTIVITIES: - - -
NET CASH
GENERATED
FROM NET
INCOME BEFORE
TAXES 230.7 4,470.6 5,360.7
----- ------- -------
CASH GENERATED
OR USED IN
THE
OPERATION: (136.8) (2,651.0) (3,201.8)
Decrease
(increase) in
accounts
receivable (5.6) (107.6) (230.7)
Decrease
(increase) in
inventories (29.6) (573.9) (690.7)
Decrease
(increase) in
accounts
payable (58.9) (1,142.2) (459.9)
Decrease
(increase) in
other
liabilities (42.7) (827.3) (1,820.4)
NET CASH FLOW
FROM
OPERATING
ACTIVITIES 93.9 1,819.6 2,158.9
---- ------- -------
NET CASH FLOW
FROM
INVESTING
ACTIVITIES (57.7) (1,117.4) (889.3)
----- -------- ------
Acquisition of
property,
plant and
equipment (94.3) (1,827.4) (1,154.4)
Proceeds from
sales of
property
plant and
equipment 11.4 220.7 54.0
Other Items 25.2 489.3 211.0
CASH FLOW
SURPLUS
(REQUIREMENTS
OF) TO BE
USED IN
FINANCING
ACTIVITIES 36.2 702.2 1,269.6
---- ----- -------
Net cash
provided by
financing
activities: (36.4) (705.4) 586.0
----- ------ -----
Proceeds from
loans 102.8 1,992.5 2,680.5
Principal
payments on
loans (115.9) (2,245.9) (1,555.3)
Dividends paid (40.2) (780.0) (899.2)
Other items 16.9 328.1 360.0
Net increase
(decrease) in
cash and
equivalents (0.2) (3.2) 1,855.6
Cash and
investments
at the
beginning of
year $788.9 15,288.9 11,961.6
------ -------- --------
CASH AND
INVESTMENTS
AT END OF
PERIOD $788.7 15,285.7 13,817.2
====== ======== ========
DERIVATIVES POSITION REPORT
Third Quarter 2016
Thousands of Mexican Pesos, as of September 30, 2016
TYPE OF FINANCIAL
INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED
----------------- --------- -------- ------------------------------ ---------------- ------------------- -------------------
3Q-2016 2Q-2016 3Q-2016 2Q-2016
------- ------- ------- -------
Forward Vanilla and Hedge $379,305 $19.38 $18.26 $6,424 $1,127 in 2016 The deals consider the possibility
KO Forward of margin calls but not another
kind of guarantee
------------------- ----- -------- ------ ------ ------ ------ ------- -----------------------------------
Futures for corn and Hedge $27,268 CORN CORN $599 $29,008 42.3% in 2016 and 57.7% in
soybean meal 2017
-------------------- ----- ------- ---- ------- ---------------------------
In USD per Bushel In USD per Bushel
month price month price
Dec-16 $3.37 Jul-16 $3.59
Jul-17 $3.60 Sep-16 $3.66
Sep-17 $3.67 Dec-16 $3.71
Dec-17 $3.77 Mar-17 $3.80
May-17 $3.85
Sep-17 $3.83
SOYBEAN MEAL SOYBEAN MEAL
In USD per ton In USD per ton
month price month price
Aug-2016 $405.80
Sep-2016 $403.70
Oct-2016 $401.10
Dec-2016 $299.60 Dec-2016 $401.00
Options of Corn Hedge $8,810 CORN CORN $ - -$ 1,961 2016
--------------- ----- ------ ----------- -------------- ----
In USD per Bushel In USD per Bushel
month price month price
Jul-16 $3.59
Sep-16 $3.66
Dec-16 $3.37 Dec-16 $3.71
Options of soybean
meal Hedge $2,322 SOYBEAN MEAL SOYBEAN MEAL -$ 242 $1,759 in 2016
------------------ ----- ------ ----------- ------ -------
In USD per ton In USD per ton
month price month price
Aug-2016 $405.80
Sep-2016 $403.70
Oct-2016 $401.10
Dec-2016 $299.60 Dec-2016 $401.00
NOTES
-The total financial instruments do not exceed 5% of total assets as of September 30, 2016.
-The notional value represents the net position as of September 30, 2016 at the exchange rate of Ps.19.38 per one dollar.
-A negative value means an unfavorable effect for the Company.
PROBABLE SCENARIO
Third Quarter 2016
Thousands of Mexican Pesos, as of September 30, 2016 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
---------------
-2.5% 2.5% 5.0% -2.5% 2.5% 5.0%
---- --- --- ---- --- ---
Forwards Vanilla, KO
Forward (1) $6,424 $18.90 $19.86 $20.35 Direct $9,706 $9,124 $11,824
-------------------- ------ ------ ------ ------ ------ ------ ------ -------
-5% 5% 10% -5% 5% 10%
Futures of Corn: (2) $599 $3.20 $3.54 $3.70 The effect will materialize as the
inventory is consumed -$ 764 $1,963 $3,326
-----
Futures of Soybean
Meal: (2) $284.6 $314.6 $329.6
------------------
Options for Corn $ - $3.20 $3.54 $3.70 -$ 133 $ - $ -
---------------- ------------------------ ----- ----- ----- ----------- ------------- ------------
Options of Soybean
Meal -$ 242 $284.6 $314.6 $329.6 -$ 359 -$ 126 -$ 10
------------------ ----------------------- ------ ------ ------ ----------- ------------ -------------
NOTES
(1) The reference value is the exchange rate of Ps. $19.38 per USD as of September 30, 2016.
(2) The reference values are; the future of corn for Dec 2016, $3.3675 USD/bushel and the future of soybeanmeal for Dec 2016, $299.60 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 2016
Thousands of Mexican Pesos, as of September 30, 2016 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, KO
Forward $6,424 $9.69 $14.54 $24.23 $29.07 Direct -$106,025 -$45,114 $33,421 $60,417
------------------- ------ ----- ------ ------ ------ ------ --------- -------- ------- -------
CONFERENCE CALL INFORMATION
The Company will host its third quarter 2016 earnings call, on Thursday, October 27(th), 2016. The earnings call will take place at 10:00 am Central Time (11:00 am ET).
To participate in the earnings call, please dial:
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.yourconferencecenter.com/AlternateNumbers/alternatenumbers.aspx?100374&t=P&o=UxwiLhSlKEKZlj
Confirmation Number: 43579079
Visit the following link to access the webcast:
http://edge.media-server.com/m/p/5d352sbt
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.
Contact Information:
Maria Guadalupe Jaquez, IR
Maria.jaquez@bachoco.net
Kathy Ellen Chaurand Peasland
Kathy.chaurand@bachoco.net
T. +52(461)618 3555
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/industrias-bachoco-announces-third-quarter-2016-results-300351219.html
SOURCE Industrias Bachoco, S.A.B. de C.V.
