INDUSTRIAS BACHOCO, S.A.B. DE C.V. CELAYA, Mexico, July 23, 2015 /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 ("2Q15") and first half ("1H15") 2015 results ended June 30, 2015. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS - 2015 vs 2014
-- Net sales increased 11.6% in 2Q15.
-- EBITDA margin was 17.6% for 2Q15 and 17.0% in the 1H15.
-- Earnings per basic and diluted share totaled $2.32 for 2Q15 and $4.43
for the 1H15.
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "In this second quarter, our company was able to take advantage of the conditions the poultry industry offered; mainly a strong demand, which is a seasonal characteristic of this quarter, as well as stable price of our main raw materials. We observed a balanced supply and demand in our main product lines in both our Mexican and US markets, even when we are observing a growth rate above the historical level of the poultry industry in both countries.
We were able to increase our total sales by 11.6% in the quarter, due mainly to increases in volume in our main product lines, while reaching double-digit profit margins, and above those reached in the same quarter of 2014. We improved our profit margins in both of our operations, in Mexico and in the USA.
In particular, we reached an EBITDA of $2,081.0 million, the highest reached by our company for a quarter.
The Company's net cash reached $12,184.4 million, strengthening our financial condition."
RECENT DEVELOPMENTS
On July 13(th), 2015, the company announced the acquisition of the breeding assets in the state of Georgia, USA, of Morris Hatchery Inc. This operation has a capacity of around one million laying hens that produce hatching eggs.
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 2014.
QUARTERLY RESULTS
NET SALES BY GEOGRAPHY
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Net Sales 11,837.2 10,608.8 1,228.4 11.6
--------- -------- -------- ------- ----
Net sales in Mexico 9,123.9 8,468.6 655.3 7.7
------------------- ------- ------- ----- ---
Net sales in the U.S. 2,713.3 2,140.2 573.1 26.8
--------------------- ------- ------- ----- ----
NET SALES BY SEGMENT
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Net Sales 11,837.2 10,608.8 1,228.4 11.6
--------- -------- -------- ------- ----
Poultry 10,703.9 9,672.7 1,031.2 10.7
------- -------- ------- ------- ----
Other 1,133.3 936.1 197.2 21.1
----- ------- ----- ----- ----
NET VOLUME SOLD BY SEGMENT
In tons Change
2Q15 2Q14 Volume %
---- ---- ------ ---
Total sales volume: 499,355 450,563 48,792 10.8
------------------- ------- ------- ------ ----
Poultry 392,749 362,806 29,943 8.3
------- ------- ------- ------ ---
Others 106,606 87,757 18,849 21.5
------ ------- ------ ------ ----
The Company's 2Q15 net sales totaled $11,837.2 million, $1,228.4 million or 11.6% more than $10,608.8 million reported in 2Q14. The increase is a result of more volume sold in all of our product lines and solid chicken and balanced feed prices during most of the quarter; this was partially offset with lower prices in eggs and pork when compared to 2Q14.
In 2Q15, sales of our U.S. operations represented 22.9% of our total sales compared to 20.2% in 2Q14.
GROSS PROFIT
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Cost of sales 8,914.2 8,151.6 762.6 9.4
------------- ------- ------- ----- ---
Gross profit 2,923.1 2,457.2 465.8 19.0
------------ ------- ------- ----- ----
Gross margin 24.7% 23.2% - -
------------ ---- ---- --- ---
In 2Q15 the cost of sales was $8,914.2 million, $762.6 million or 9.4% higher than $8,151.6 million reported in 2Q14; the increase in the cost of sales is mainly attributed to more volume sold, as our average cost per unit was lower than the average cost per unit in 2Q14, as a result of decreases in main raw material prices and productivity improvements.
Therefore, we were able to post a gross profit of $2,923.1 million and a gross margin of 24.7% in 2Q15; this profit is 19.0% higher than a gross profit of $2,457.2 million and a gross margin of 23.2% in 2Q14.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")
In
millions
of
pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Total
SG&A 1,044.5 920.6 123.9 13.5
----- ------- ----- ----- ----
Total SG&A expenses in 2Q15 were $1,044.5 million, $123.9 million or 13.5% more than the $920.6 million reported in 2Q14. This increase is mainly attributed to higher sales and administrative expenses as our volume sold increased, as well a slight increase in our unit delivery expenses.
Total SG&A expenses as a percentage of net sales represented 8.8% in 2Q15 compared to 8.7% in 2Q14.
OTHER INCOME (EXPENSE), NET
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Other income (expense), net 5.0 (6.5) 11.5 (176.5)
--------------------------- --- ---- ---- ------
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 2Q15, we recorded other income of $5.0 million, compared with other expense of $6.5 million reported in 2Q14; this is mainly attributed to profits of some unused assets, as well as insurance recoveries.
OPERATING INCOME
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Operating income 1,883.5 1,530.1 353.4 23.1
---------------- ------- ------- ----- ----
Operating margin 15.9% 14.4% - -
---------------- ---- ---- --- ---
Operating income in 2Q15 totaled $1,883.5 million, which represents an operating margin of 15.9%, a higher margin when compared to operating income of $1,530.1 million and a 14.4% operating margin reported in 2Q14.
The increase in operating income is mainly attributed to higher gross income in 2Q15.
NET FINANCIAL INCOME
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Net Financial Income 132.1 60.2 71.9 119.5
-------------------- ----- ---- ---- -----
Financial Income 161.7 94.6 67.1 70.9
---------------- ----- ---- ---- ----
Financial Expense 29.6 34.4 (4.8) (14.0)
----------------- ---- ---- ---- -----
In 2Q15, the Company reported net financial income of $132.1 million, compared to income of $60.2 million reported in the same period of 2014. The increase is mainly attributed to higher interest income and lower interest expenses.
TAXES FOR THE PERIOD
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Total Taxes 621.1 501.3 119.8 23.9
----------- ----- ----- ----- ----
Income tax 580.5 354.0 226.5 64.0
---------- ----- ----- ----- ----
Deferred income tax 40.6 147.3 (106.7) (72.4)
------------------- ---- ----- ------ -----
Total taxes for the 2Q15 were $621.1 million, compared with total taxes of $501.3 million in the same period of 2014; the increase is attributed to a higher income before taxes, when compared with 2Q14.
NET INCOME
In millions of pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Net income 1,394.5 1,088.9 305.6 28.1
---------- ------- ------- ----- ----
Net margin 11.8% 10.3% - -
---------- ---- ---- --- ---
Basic and diluted
earnings per share(1) 2.32 1.81 - -
---------------------- ---- ---- --- ---
Basic and diluted
earnings per ADR(2) 27.89 21.73 - -
-------------------- ----- ----- --- ---
Weighted average Shares
outstanding(3) 599,442 599,875 - -
----------------------- ------- ------- --- ---
(1) In pesos
(2) in pesos, one ADR equals to twelve shares
(3) In thousands of shares
The net income for 2Q15 was $1,394.5 million, representing a net income of $2.32 pesos per share, compared with a net income of $1,088.9 million, which represented $1.81 pesos of net income per share in 2Q14. The increase is mainly attributed to better operating results.
Net margin was 11.8% and 10.3% for 2Q15 and 2Q14, respectively.
EBITDA AND ADJUSTED EBITDA
In millions of
pesos 2Q15 2Q14 Change
------
$ $ $ %
--- --- --- ---
Net income 1,393.5 1,086.5 307.0 28.3
---------- ------- ------- ----- ----
Income tax
expense
(benefit) 621.1 501.3 119.8 23.9
---------- ----- ----- ----- ----
Result in
associates 1.0 2.4 (1.4) (58.3)
----------- --- --- ---- -----
Net finance
(income)
expense (132.1) (60.2) (71.9) 119.5
----------- ------ ----- ----- -----
Depreciation
and
amortization 197.5 215.6 (18.1) (8.4)
------------- ----- ----- ----- ----
EBITDA 2,081.0 1,745.7 335.3 19.2
------ ------- ------- ----- ----
EBITDA Margin
(%) 17.6% 16.5% - -
------------- ---- ---- --- ---
Other expense
(income) net (5.0) 6.5 11.5 (176.5)
------------- ---- --- ---- ------
Adjusted EBITDA 2,076.0 1,752.2 323.9 18.5
--------------- ------- ------- ----- ----
Adjusted EBITDA
Margin 17.5% 16.5% - -
--------------- ---- ---- --- ---
Net revenues 11,837.2 10,608.8 1,228.4 11.6
------------ -------- -------- ------- ----
EBITDA in 2Q15 reached $2,081.0 million, representing an EBITDA margin of 17.6%, compared to an EBITDA of $1,745.7 million in 2Q14, with an EBITDA margin of 16.5%.
The adjusted EBITDA in 2Q15 reached $2,076.0 million, representing an adjusted EBITDA margin of 17.5%, compared to adjusted EBITDA of $1,752.2 million in 2Q14, with an adjusted EBITDA margin of 16.5%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY
In millions of pesos 2H15 2H14 Change
------
$ $ $ %
--- --- --- ---
Net Sales 23,243.2 20,252.2 2,991.0 14.8
--------- -------- -------- ------- ----
Net sales in Mexico 17,768.5 16,215.5 1,553.0 9.6
------------------- -------- -------- ------- ---
Net sales in the U.S. 5,474.7 4,036.7 1,438.0 35.6
--------------------- ------- ------- ------- ----
NET SALES BY SEGMENT
In millions of pesos 2H15 2H14 Change
------
$ $ $ %
--- --- --- ---
Net Sales 23,243.2 20,252.2 2,991.0 14.8
--------- -------- -------- ------- ----
Poultry 21,117.2 18,462.9 2,654.3 14.4
------- -------- -------- ------- ----
Other 2,126.0 1,789.3 336.7 18.8
----- ------- ------- ----- ----
NET VOLUME SOLD BY SEGMENT
In metric tons Change
------
2H15 2H14 Volume %
---- ---- ------ ---
Total sales volume: 983,855 892,502 91,353 10.2
------------------- ------- ------- ------ ----
Poultry 780,444 721,745 58,699 8.1
------- ------- ------- ------ ---
Others 203,411 170,757 32,654 19.1
------ ------- ------- ------ ----
During the first half of 2015, net sales totaled $23,243.2 million; $2,991.0 million or 14.8% more than $20,252.2 million reported in the same period of 2014. The increase in sales is attributed to higher volume sold and higher weighted average price as compared with the first half of 2014.
In 1H15, sales of our U.S. operations represented 23.6% of our total sales, compared with 19.9% in 1H14.
Operating Results
In millions of pesos 1H15 1H14 Change
------
$ $ $ %
--- --- --- ---
Cost of Sales 17,636.6 16,005.7 1,630.9 10.2
------------- -------- -------- ------- ----
Gross Profit 5,606.6 4,246.5 1,360.1 32.0
------------ ------- ------- ------- ----
Total SG&A 2,052.7 1,792.0 260.8 14.6
---------- ------- ------- ----- ----
Other Income (expense) (8.2) (41.5) 33.2 (80.1)
--------------------- ---- ----- ---- -----
Operating Income 3,545.6 2,413.1 1,132.6 46.9
---------------- ------- ------- ------- ----
Net Financial Income 313.1 110.9 202.2 182.3
-------------------- ----- ----- ----- -----
Income Tax 1,198.5 775.4 423.1 54.6
---------- ------- ----- ----- ----
Net Income 2,660.2 1,748.5 911.7 52.1
---------- ------- ------- ----- ----
In 1H15 the cost of sales totaled $17,636.6 million, $1,630.9 million or 10.2% higher than $16,005.7 million reported 1H14; the increase in the cost of sales is mainly attributed to higher volume as weighted average unit cost of sales showed a small variation as compare with the weighted unit cost of the same period of 2014.
As a result, we reached a gross profit of $5,606.6 million and a gross margin of 24.1% in 1H15, a higher result than $4,246.5 million of gross profit and a margin of 21.0% reached in the same period of 2014.
Total SG&A expenses in 1H15 were $2,052.7 million, $260.8 million or 14.6% more than the $1,792.0 million reported in 1H14. This increase is mainly attributed to the higher volume sold. Total SG&A expenses as a percentage of net sales represented 8.8% in 1H15; the same percentage reported in 1H14.
In 1H15 we had other expenses of $8.2 million, compared with other expenses of $41.5 million reported in 1H14.
The operating income in 1H15 was $3,545.6 million, which represents an operating margin of 15.3%, an increase of 46.9% from an operating income of $2,413.1 million and an operating margin of 11.9% in 1H14.
The net financial income in 1H15 was $313.1 million, higher when compared to net financial income of $110.9 million in 1H14, mainly attributed to a higher interest income resulting from the high levels of cash and lower interest expenses.
Total taxes were $1,198.5 million as of June 30, 2015. These taxes include $1,123.2 million of income tax and $75.3 million of deferred income taxes; this figure compares to total taxes of $775.4 million in 1H14; the increase was due to a higher income before taxes.
All the above result in a net income of $2,660.2 million or 11.4% of net margin in the 1H15, which represents $4.43 pesos of earnings per share, while in the 1H14 the net income totaled $1,748.5 million, 8.6% of net margin and $2.91 pesos of net income per share.
EBITDA
AND
ADJUSTED
EBITDA
In
millions
of pesos 1H15 1H14 Change
------
$ $ $ %
--- --- --- ---
Net
income 2,656.9 1,746.2 910.7 52.2
------- ------- ------- ----- ----
Income
tax
expense
(benefit) 1,198.5 775.4 423.1 54.6
---------- ------- ----- ----- ----
Result in
associates 3.4 2.4 1.0 41.2
----------- --- --- --- ----
Net
finance
(income)
expense (313.1) (110.9) (202.2) 182.3
--------- ------ ------ ------ -----
Depreciation
and
amortization 396.9 438.7 (41.8) (9.5)
------------ ----- ----- ----- ----
EBITDA 3,942.5 2,851.7 1,090.8 38.3
------ ------- ------- ------- ----
EBITDA
Margin
(%) 17.0% 14.1% - -
------- ---- ---- --- ---
Other
expense
(income)
net 8.2 41.5 (33.2) (80.1)
--------- --- ---- ----- -----
Adjusted
EBITDA 3,950.8 2,893.2 1,057.6 36.6
-------- ------- ------- ------- ----
Adjusted
EBITDA
Margin 17.0% 14.3% - -
-------- ---- ---- --- ---
Net
revenues 23,243.2 20,252.2 2,991.0 14.8
--------- -------- -------- ------- ----
EBITDA in 1H15 reached $3,942.5 million, representing an EBITDA margin of 17.0%, compared to EBITDA of $2,851.7 million in 1H14, with an EBITDA margin of 14.1%.
The adjusted EBITDA in 1H15 reached $3,950.8 million, representing an adjusted EBITDA margin of 17.0%, compared to adjusted EBITDA of $2,893.2 million in 1H14, with an adjusted EBITDA margin of 14.3%.
BALANCE SHEET
BALANCE SHEET
DATA
In millions of
pesos June 30, 2015 Dec. 31, 2014 Change
------
$ $ $ %
--- --- --- ---
TOTAL ASSETS 37,943.9 34,793.8 3,141.1 9.0
------------ -------- -------- ------- ---
Cash and cash
equivalents 15,263.5 11,961.6 3,301.9 27.6
------------- -------- -------- ------- ----
Accounts
receivable 2,104.9 2,976.5 (871.6) (29.3)
----------- ------- ------- ------ -----
TOTAL
LIABILITIES 11,655.3 10,431.7 1,223.6 11.7
------------ -------- -------- ------- ----
Accounts
payable 3,118.6 3,384.3 (265.7) (7.9)
-------- ------- ------- ------ ----
Short-term debt 579.9 798.0 (218.1) (27.3)
--------------- ----- ----- ------ -----
Long-term debt 2,499.2 1,652.5 846.8 51.2
-------------- ------- ------- ----- ----
TOTAL
STOCKHOLDERS'
EQUITY 26,279.6 24,362.1 1,917.6 7.9
-------------- -------- -------- ------- ---
Capital stock 1,173.9 1,174.4 (0.5) (0.0)
------------- ------- ------- ---- ----
Cash and equivalents as of June 30, 2015 totaled $15,263.5 million, up $3,301.9 million or 27.6% from $11,961.6 million as of December 31, 2014.
Total debt as of June 30, 2015 was $3,079.1 million, compared to $2,450.5 million reported as of December 31, 2014, mainly as a result of higher long-term bank debt.
Net cash as of June 30, 2015 was $12,184.4 million, compared to net cash of $9,511.2 million as of December 31, 2014.
CAPITAL EXPENDITURES
In millions of pesos 1H15 1H14 Change
------
$ $ $ %
--- --- --- ---
Capital Expenditures 605.0 474.9 130.2 27.4
-------------------- ----- ----- ----- ----
Total CAPEX for the 1H15 was $605.0 million and $474.9 million in 1H14, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION
-----------------
As of June 30, 2015
-------------------
Total Shares 600,000,000
------------ -----------
Total free float 26.75%
---------------- -----
Market cap (millions of pesos) $42,300
------------------------- -------
Source: yahoo finances
----------------------
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 Average Close High Low Average Close
----- ---- --- ------- ----- ---- --- ------- -----
Jun-15 73.07 70.50 71.72 70.50 56.36 54.11 55.52 54.11
------ ----- ----- ----- ----- ----- ----- ----- -----
May-15 73.70 68.32 71.37 73.70 58.14 54.34 56.06 57.37
------ ----- ----- ----- ----- ----- ----- ----- -----
Apr-15 69.69 64.38 66.87 68.32 54.40 50.87 52.76 53.79
------ ----- ----- ----- ----- ----- ----- ----- -----
Mar-15 67.40 63.33 64.87 63.36 53.78 48.84 51.12 49.85
------ ----- ----- ----- ----- ----- ----- ----- -----
Feb-15 64.00 60.20 63.03 63.26 51.58 48.97 50.67 51.02
------ ----- ----- ----- ----- ----- ----- ----- -----
Jan-15 63.60 59.23 60.75 61.50 51.55 47.97 49.51 48.84
------ ----- ----- ----- ----- ----- ----- ----- -----
ANALYST COVERAGE
Institution Analyst name E-mail
----------- ------------ ------
ACTINVER Carlos Hermosillo chermosillo@actinver.com.mx
-------- ----------------- ---------------------------
BBVA BANCOMER Fernando Olvera fernando.olvera@bbva.com
------------- --------------- ------------------------
GBM Miguel Mayorga mmayorga@gbm.com.mx
--- -------------- -------------------
INTERACCIONES CASA DE BOLSA Brian Flores Ibflorese@interacciones.com
--------------------------- ------------ ---------------------------
JPMORGAN Pedro Leduc pedro.a.leduc@jpmorgan.com
-------- ----------- --------------------------
INTERCAM GRUPO FINANCIERO Fernanda Simon fsimon@intercam.com.mx
------------------------- -------------- ----------------------
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 $15.70 per USD $1.0, which corresponds to the rate at the close of June 30, 2015, 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 2015 2015 2014*
---------------- ---- ---- ----
TOTAL ASSETS $2,417.0 37,934.9 34,793.8
======== ======== ========
Total current assets 1,487.0 23,338.2 20,852.0
------- -------- --------
Cash and cash equivalents 972.5 15,263.5 11,961.6
Total accounts receivable 134.1 2,104.9 2,976.5
Inventories 278.6 4,373.3 4,469.5
Other current assets 101.7 1,596.4 1,444.3
Total non current assets 930.0 14,596.7 13,941.8
----- -------- --------
Net property, plant and equipment 789.4 12,390.3 12,054.8
Other non current Assets 140.6 2,206.4 1,887.0
TOTAL LIABILITIES $742.6 11,655.3 10,431.7
====== ======== ========
Total current liabilities 377.9 5,931.8 5,655.5
----- ------- -------
Notes payable to banks 36.9 579.9 798.0
Accounts payable 198.7 3,118.6 3,384.3
Other taxes payable and other accruals 142.3 2,233.3 1,473.2
Total long-term liabilities 364.7 5,723.5 4,776.2
----- ------- -------
Long-term debt 159.2 2,499.2 1,652.5
Other non current liabilities 6.4 100.8 90.9
Deferred income taxes 199.0 3,123.4 3,032.8
TOTAL STOCKHOLDERS' EQUITY $1,674.4 26,279.6 24,362.1
======== ======== ========
Capital stock 74.8 1,173.9 1,174.4
Commission in shares issued 25.5 399.6 399.6
Repurchased shares 47.5 745.8 101.1
Retained earnings 1,503.4 23,596.2 22,513.2
Others accounts 20.1 316.1 129.1
Non controlling interest 3.1 48.0 44.6
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,417.0 37,934.9 34,793.8
======== ======== ========
*Audited
CONSOLIDATED STATEMENT OF INCOME
Second Quarter Results, ended June 30:
-Unaudited-
U.S. Dollar
In millions pesos 2015 2015 2014
----------------- ---- ---- ----
Net sales $754.2 11,837.2 10,608.8
Cost of sales 568.0 8,914.2 8,151.6
----- ------- -------
Gross profit 186.2 2,923.1 2,457.2
SG&A 66.5 1,044.5 920.6
Other income (expenses), net 0.3 5.0 (6.5)
--- --- ----
Operating income 120.0 1,883.5 1,530.1
Net finance income 8.4 132.1 60.2
Income tax 39.6 621.1 501.3
---- ----- -----
Net Income $136.8 1,394.5 1,088.9
====== ======= =======
Non-controlling interest 0.1 1.0 2.44
Net controlling interest profit 88.9 1,393.5 1,086.5
Basic and diluted earnings per share 0.15 2.32 1.81
Basic and diluted earnings per ADR 1.78 27.90 21.73
Weighted average Shares outstanding(1) 599,442 599,442 599,875
EBITDA Result $132.6 2,081.0 1,745.7
====== ======= =======
Gross margin 24.7% 24.7% 23.2%
Operating margin 15.9% 15.9% 14.4%
Net margin 11.8% 11.8% 10.3%
EBITDA margin 17.6% 17.6% 16.5%
(1) In thousands
CONSOLIDATED STATEMENT OF INCOME
Accumulated results, for the six months ended June 30.
-Unaudited-
U.S. Dollar
In millions pesos 2015 2015 2014
----------------- ---- ---- ----
Net sales $1,480.9 23,243.2 20,252.2
Cost of sales 1,123.7 17,636.6 16,005.7
------- -------- --------
Gross profit 357.2 5,606.6 4,246.5
Selling, general and administrative expenses 130.8 2,052.7 1,792.0
Other income (expenses), net (0.5) (8.2) (41.5)
---- ---- -----
Operating income 225.9 3,545.6 2,413.1
Net finance income 19.9 313.1 110.9
Income tax 76.4 1,198.5 775.4
---- ------- -----
Net income $265.8 2,660.2 1,748.5
====== ======= =======
Non-controlling interest 0.2 3.4 2.4
Net controlling interest profit 169.7 2,656.9 1,746.2
Basic and diluted earnings per share 0.28 4.43 2.91
Basic and diluted earnings per ADR 3.39 53.2 34.93
Weighted average Shares outstanding(1) 599,488 599,488 599,910
EBITDA Result $251.2 3,942.5 2,851.7
====== ======= =======
Gross margin 24.1% 24.1% 21.0%
Operating margin 15.3% 15.3% 11.9%
Net margin 11.5% 11.4% 8.6%
EBITDA margin 17.0% 17.0% 14.1%
(1) In thousands
CONSOLIDATED STATEMENT OF CASH FLOWS
In million of pesos
-Unaudited-
U.S. Dollar June 30,
--------
2015 2015 2014
---- ---- ----
NET MAJORITY INCOME BEFORE INCOME TAX $245.9 3,858.8 2,524.0
------ ------- -------
ITEMS THAT DO NOT REQUIRE CASH: - - -
ITEMS RELATING TO INVESTING ACTIVITIES: 27.6 433.9 483.3
---- ----- -----
Depreciation and others 25.3 396.9 438.7
Income (loss) on sale of plant and equipment 2.4 37.0 47.0
Other Items - - (2.4)
ITEMS RELATING TO FINANCING ACTIVITIES: 3.6 57.3 73.8
--- ---- ----
Interest income (expense) 3.6 57.3 73.8
Other Items - - -
NET CASH GENERATED FROM NET INCOME BEFORE TAXES 277.2 4,349.9 3,081.0
----- ------- -------
CASH GENERATED OR USED IN THE OPERATION: 33.7 528.4 (370.1)
Decrease (increase) in accounts receivable 34.2 536.9 (55.1)
Decrease (increase) in inventories 6.0 94.5 216.0
Decrease (increase) in accounts payable (7.4) (115.9) (521.5)
Decrease (increase) in other liabilities 0.8 12.9 (9.6)
NET CASH FLOW FROM OPERATING ACTIVITIES 310.8 4,878.4 2,710.9
----- ------- -------
NET CASH FLOW FROM INVESTING ACTIVITIES (38.9) (611.0) (416.0)
----- ------ ------
Acquisition of property, plant and equipment (38.5) (605.0) (474.9)
Proceeds from sales of property plant and equipment 2.5 39.7 13.4
Other Items (2.9) (45.6) 45.5
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 271.9 4,267.4 2,294.9
----- ------- -------
Net cash provided by financing activities: 3.3 52.0 469.4
--- ---- -----
Proceeds from loans 119.4 1,874.5 492.0
Principal payments on loans (79.9) (1,254.0) (69.4)
Dividends paid (28.6) (449.6) -
Other items (7.6) (118.9) 46.8
Net increase (decrease) in cash and equivalents 202.8 3,183.0 1,999.2
Cash and investments at the beginning of year $703.2 11,036.1 6,716.9
------ -------- -------
CASH AND INVESTMENTS AT END OF PERIOD $906.0 14,219.1 8,716.1
====== ======== =======
DERIVATIVES POSITION REPORT
Second Quarter 2015
Thousands of Mexican Pesos, as of June 30, 2015
TYPE OF FINANCIAL INSTRUMENT OBJETIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES
REQUIRED
--- --- --------
2Q-2015 1Q-2015 2Q-2015 1Q-2015
------- ------- ------- -------
Knock out forwards. Hedge $ - $15.70 $15.26 $ - $8,248 0 The deals consider the possibility
of margin calls but not another
kind of guarantee
------------------- ----- ------ ------ ------ ----------- ------ --- ----------------------------------
Futures for corn and soybean meal Hedge $240,036 CORN CORN $25,382 -$ 771 in 2015
--------------------------------- -----
In USD per Bushel In USD per Bushel
month price month price
May-2015 $3.763
Jul-2015 $4.140 Jul-2015 $3.843
Sep-2015 $4.220 Sep-2015 $3.920
Dec-2015 $4.315 Dec-2015 $4.008
-------- ------ -------- ------
SOYBEAN MEAL SOYBEAN MEAL
In USD per ton In USD per ton
month price month price
May-2015 $326.8
Jul-2015 $359.5
Aug-2015 $351.9
Sep-2015 $348.3
Oct-2015 $345.5
-------- ------
Options of Corn Hedge $ - CORN CORN $ - -$ 92 2015
--------------- --- --- --- ----
In USD per Bushel In USD per Bushel
month price month price
Jul-2015 $3.84
Sep-2015 $3.92
Dec-2015 $4.01
-------- -----
Options of soybean meal Hedge $246 SOYBEAN MEAL SOYBEAN MEAL $246 $55 2015
----------------------- ----- ---- --- ----
In USD per ton In USD per ton
month price month price
May-2015 $326.80
Jul-2015 $325.20
Aug-2015 $351.90 Aug-2015 $323.70
-------- ------- -------
Options of Heating Oil Hedge $ - Heating Oil Heating Oil $ - $216 2015
---------------------- ----- --- --- ---- ----
In USD per gallon In US cents per pound
month price month price
Jul-2015 $1.73
Aug-2015 $1.89 Aug-2015 $1.75
Sep-2015 $1.89 Sep-2015 $1.77
Oct-2015 $1.90 Oct-2015 $1.79
Nov-2015 $1.92 Nov-2015 $1.81
Dec-2015 $1.94
-------- -----
-The total financial instruments not exceed 5% of total assets as of June 30, 2015.
-The notional value represents the net position as of June 30, 2015 at the exchange rate of Ps.15.70 per one dollar.
-A negative value means an unfavorable effect for the Company.
PROBABLE SCENARIO
Second Quarter 2015
Thousands of Mexican Pesos, as of June 30, 2015 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%
---- --- --- ---- --- ---
Knock Out Forwards (1) $ - $15.31 $16.09 $16.49 Direct $4,252 $ - $ -
--------------------- --- ------ ------ ------ ------ ------ --- ---
-5% 5% 10% -5% 5% 10%
Futures of Corn: (2) $25,382 $3.9 $4.3 $4.6 The effect will $13,380 $37,383 $49,385
Futures of Soybean Meal: (2) $341.5 $377.5 $395.5 materialize as the
inventory is consumed
---------------------
Options for Corn $ - $ - $ - $ - $ -
$ - $ -
Options of Soybean Meal $246 $334.3 $369.5 $387.1 $135 $356 $467
----------------------- ---- ------ ------ ------ ---- ---- ----
Options of Heating Oil $ - $1.79 $1.98 $2.08 $56 $ - $ -
---------------------- --- ----- ----- ----- --- ---- ----
(1) The reference value is the exchange rate of Ps. $15.70 per USD as of June 30, 2015.
(2) The reference values are; the future of corn for July 2015, $4.1400 USD/bushel, the future of soybean meal for July 2015, $359.50 USD/ton, and the future for heating oil for August 2015, $1.89 USD per gallon.
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.
CONFERENCE CALL INFORMATION
The Company will host its second quarter 2015 earnings call, on Friday, July 24, 2015. 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.yourconferencecenter.com/AlternateNumbers/alternatenumbers.aspx?100374&t=P&o=UsUlXpdnvTgWzV
Confirmation Number: 40130524
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 AA+ (MEX), representing high credit quality by Fitch Mexico, S.A. de C.V., and HR AA+ which signals that the Company and the offering both have high 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
T. +52(461)618 3555
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/industrias-bachoco-announces-second-quarter-2015-results-300117991.html
SOURCE Industrias Bachoco, S.A.B. de C.V.
