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27.07.2020 23:30:00
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Industrias Bachoco Announces Second Quarter 2020 Results
CELAYA, Mexico, July 27, 2020 /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 ("2Q20") and first half ("1H20") 2020 ended on June 30, 2020. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS 2020
- Net sales decreased 2.7% in 2Q20 and increased 3.1% in 1H20
- EBITDA margin was 2.7% for 2Q20 and 4.3% for the 1H20
- SG&A as percentage of net sales was 9.5% and 9.8% for 2Q20 and 1H20 respectively.
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "During the 2Q20 we faced unprecedented challenges in our operations in Mexico and U.S. due to COVID-19 pandemic. Confinement measures established in both countries, and the slowdown in economic growth, caused contractions in demand in our both markets and particularly in our food service channel.
This slowdown in demand created oversupply conditions which put pressure in prices of our main business lines, resulting in an atypical 2Q.
On the other hand, Mexican peso depreciated respect to the U.S dollar, more than 20% quarter over quarter, this had a negative impact in our cost of sales despite the good levels on prices of our main raw materials.
Regarding our operations, as part of an essential sector both in Mexico and the U.S, we managed to quickly implement safety measures in all our facilities and distribution network which allowed us to keep our commitments with our customers and final consumers.
We are aware that negative economic effects due to the pandemic not only impacted industries in general, but also affected our communities.
Bachoco has been known for being close to our society in difficult times and this pandemic was not the exception. During the months of April and May, in coordination with local authorities, we implemented two programs to help those in need: "Caldito de Apoyo" and "Apoyo de Corazon".
With "Caldito de Apoyo" we set up a food truck to deliver 1,500 plates of chicken soup every day for 2 weeks outside 15 hospitals around Mexico City and, in a second phase, we expanded our chicken soup delivery to 29 more hospitals in the states of Morelos, Puebla, and Nuevo Leon.
With "Apoyo de Corazon", national wide through our Business Units, we donated to private and government institutions more than 268,000 kilograms of chicken to be distributed to communities affected by the pandemic reaching more than 219,000 people.
Despite the challenging conditions of this quarter, we ended with a net cash position of $15,223 million, and the fundamentals of our company remain in place.
It is hard to predict what the challenges will be for the rest of the year, however, we are confident that with the effort and commitment of our team members and our financial discipline will allow us to face the uncertainties to come."
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 2019.
By the end of 2Q20 Mexican authorities gave us the approval to move forward with the business arrangement with Sonora Agropecuaria (SASA), a swine processor and distributor. Therefore, our balance sheet figures of June 2020 include the integration of SASA. Income Statement will be integrated in 3Q20.
QUARTERLY RESULTS
NET SALES BY GEOGRAPHY | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Net Sales | 16,431.9 | 16,884.1 | (452.2) | (2.7) | |
Net sales in Mexico | 11,339.9 | 12,537.4 | (1,197.5) | (9.6) | |
Net sales in the U.S. | 5,092.0 | 4,346.7 | 745.3 | 17.1 | |
NET SALES BY SEGMENT | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | $ | ||
Net Sales | 16,431.9 | 16,884.1 | (452.2) | (2.7) | |
Poultry | 14,796.3 | 15,259.2 | (462.9) | (3.0) | |
Other | 1,635.6 | 1,624.9 | 10.7 | 0.7 | |
NET VOLUME SOLD BY SEGMENT | ||||||
In tons | Change | |||||
2Q20 | 2Q19 | Volume | % | |||
Total sales volume: | 554,677 | 575,729 | (21,052.7) | (3.7) | ||
Poultry | 433,484 | 436,570 | (3,085.8) | (0.7) | ||
Others | 121,192 | 139,159 | (17,966.9) | (12.9) | ||
The Company's 2Q20 net sales totaled $16,431.9 million; $452.2 million or 2.7% less than the $16,884.1 million reported in 2Q19. The decrease was mainly a result of lower prices in poultry.
In 2Q20, sales of our U.S. operations represented 31.0% of our total sales compared to 25.7% in 2Q19.
GROSS PROFIT | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Cost of sales | 14,574.5 | 13,164.5 | 1,410.0 | 10.7 | |
Gross profit | 1,857.4 | 3,719.6 | (1,862.2) | (50.1) | |
Gross margin | 11.3% | 22.0% | - | - | |
In 2Q20, cost of sales was $14,574.5 million; $1,410.0 million or 10.7% higher than the $13,164.5 million reported in 2Q19. This increase was due to higher unit cost mainly driven by the depreciation of more than 20% of the Mexican peso vs the U.S. dollar.
The Company´s gross profit in 2Q20 was $1,857.4 million, 50.1% lower than the gross profit of $3,719.6 million in 2Q19, with a gross margin of 11.3% for 2Q20 vs 22.0% in 2Q19. This is a result of lower prices in poultry and higher unit cost in our main business lines.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")
| |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Total SG&A | 1,567.0 | 1,550.8 | 16.2 | 1.0 | |
Total SG&A expenses in 2Q20 were $1,567.0 million; $16.2 million higher than the $1,550.8 million reported in 2Q19. Total SG&A expenses as a percentage of net sales represented 9.5% in 2Q20 and 9.2% in 2Q19. The increase was mainly driven by some additional expenses in health and security equipment related to COVID-19.
OTHER INCOME (EXPENSE), NET | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Other income (expense), net | (207.5) | (5.0) | (202.5) | 4,031.3 | |
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 2Q20, we recorded other expenses of $207.5 million, compared with other expenses of $5.0 million reported in 2Q19.
OPERATING INCOME | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Operating income | 82.8 | 2,163.8 | (2,080.9) | (96.2) | |
Operating margin | 0.5% | 12.8% | - | - | |
Operating income in 2Q20 totaled $82.8 million; $2,080.9 million lower than $2,163.8 million reported in 2Q19. This represents an operating margin of 0.5% for 2Q20, lower when compared to the same period of 2019. The decrease in operating income is mainly attributed to lower poultry prices, higher cost of sales and higher other expenses in 2Q20.
NET FINANCIAL INCOME | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Net Financial Income | (122.3) | 91.6 | (213.8) | (233.6) | |
Financial Income | (42.3) | 184.4 | (226.7) | (122.9) | |
Financial Expense | 80.0 | 92.8 | (12.8) | (13.8) | |
In 2Q20, the Company reported net financial expenses of $122.3 million, compared to the net financial income of $91.6 million reported in the same period of 2019. The decrease is mainly attributed to lower exchange rate gains, as the peso appreciated in 2Q20 when compared to 1Q20.
TAXES FOR THE PERIOD | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Total Taxes | (11.2) | 663.4 | (674.6) | (101.7) | |
Income tax | (407.6) | 652.2 | (1,059.9) | (162.5) | |
Deferred income tax | 396.4 | 11.2 | 385.2 | 3,439.6 | |
Total taxes for the 2Q20 were $674.6 million lower when compared with total taxes of $663.41 million in the same period of 2019. This was a result of negative income before taxes reported in 2Q20.
NET INCOME | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Net income | (28.2) | 1,591.9 | (1,620.1) | (101.8) | |
Net margin | (0.2)% | 9.4% | - | - | |
Basic and diluted earnings per share1 | (0.06) | 2.65 | (2.7) | n/a | |
Basic and diluted earnings per ADR2 | (0.70) | 31.78 | (32.5) | n/a | |
Weighted average Shares outstanding3 | 599,787 | 600,000 | - | - | |
1 In pesos | |||||
2 in pesos, one ADR equals to twelve shares | |||||
3 In thousands of shares | |||||
For the 2Q20 we had negative Net income of $28.2 million, representing a negative basic and diluted income per share of $(0.06), compared with a net income of $1,591.9 million, which represented $2.65 pesos of net income per share in 2Q19. This decrease was mainly attributed to lower operating results. Net margin in 2Q20 was a negative 0.2% compared to a positive 9.4% reported in 2Q19.
EBITDA | |||||
In millions of pesos | 2Q20 | 2Q19 | Change | ||
$ | $ | $ | % | ||
Net income | (34.8) | 1,588.8 | (1,623.6) | (102.2) | |
Income tax expense (benefit) | (11.2) | 663.4 | (674.6) | (101.7) | |
Result in associates | 6.6 | 3.1 | 3.5 | 115.5 | |
Net finance (income) expense | 122.3 | (91.6) | 213.8 | (233.6) | |
Depreciation and amortization | 354.8 | 319.6 | 35.2 | 11.0 | |
EBITDA | 437.6 | 2,483.3 | (2,045.7) | (82.4) | |
EBITDA Margin (%) | 2.7% | 14.7% | - | - | |
Net revenues | 16,431.9 | 16,884.1 | (452.2) | (2.7) | |
EBITDA in 2Q20 reached $437.6 million representing an EBITDA margin of 2.7%, compared to an EBITDA of $2,483.3 million in 2Q19, with an EBITDA margin of 14.7%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY | |||||
In millions of pesos | 1H20 | 1H19 | Change | ||
$ | $ | $ | % | ||
Net Sales | 32,170.3 | 31,207.7 | 962.6 | 3.1 | |
Net sales in Mexico | 22,407.5 | 22,834.0 | (426.5) | (1.9) | |
Net sales in the U.S. | 9,762.8 | 8,373.8 | 1,389.1 | 16.6 | |
NET SALES BY SEGMENT | |||||
In millions of pesos | 1H20 | 1H19 | Change | ||
$ | $ | $ | % | ||
Net Sales | 32,170.3 | 31,207.7 | 962.6 | 3.1 | |
Poultry | 28,959.1 | 28,112.0 | 847.1 | 3.0 | |
Other | 3,211.2 | 3,095.7 | 115.5 | 3.7 | |
NET VOLUME SOLD BY SEGMENT | ||||||
In metric tons | Change | |||||
1H20 | 1H19 | Volume | % | |||
Total sales volume: | 1,142,694 | 1,128,905 | 13,789.9 | 1.2 | ||
Poultry | 890,651 | 862,315 | 28,336.2 | 3.3 | ||
Others | 252,043 | 266,589 | (14,546.2) | (5.5) | ||
During the first half of 2020, net sales totaled $32,170.3 million; $962.6 million or 3.1% more than $31,207.7 million reported in the same period of 2019. The increase in sales is mainly attributable to higher prices and volume sold when compared to the first half of 2019.
In 1H20, sales of our U.S. operations represented 30.3% of our total sales, compared with 26.8% in 1H19.
OPERATING RESULTS | |||||
In millions of pesos | 1H20 | 1H19 | Change | ||
$ | $ | $ | % | ||
Cost of Sales | 28,131.8 | 25,680.2 | 2,451.6 | 9.5 | |
Gross Profit | 4,038.5 | 5,527.5 | (1,489.0) | (26.9) | |
Total SG&A | 3,139.7 | 3,025.2 | 114.5 | 3.8 | |
Other Income (expense) | (212.0) | (3.4) | (208.6) | 6,130.2 | |
Operating Income | 686.8 | 2,498.9 | (1,812.1) | (72.5) | |
Net Financial Income | 2,304.2 | 167.6 | 2,136.7 | 1,275.1 | |
Income Tax | 849.1 | 772.1 | 77.0 | 10.0 | |
Net Income | 2,141.9 | 1,894.4 | 247.5 | 13.1 | |
In 1H20, the cost of sales totaled $28,131.8 million; $2,451.6 million or 9.5% higher than $25,680.2 million reported in 1H19. The increase in cost of sales is mainly attributed to higher unit cost particularly driven of the depreciation of the Mexican peso of around 13% vs the U.S. dollar.
As a result, we reached a gross profit of $4,038.5 million and a gross margin of 12.6% in 1H20, when compared to $5,527.5 million of gross profit and margin of 17.7% reached in the same period of 2019.
Total SG&A expenses in 1H20 were $3,139.7 million; $114.5 million or 3.8% more than the $3,025.2 million reported in 1H19. In 1H20 total SG&A expenses as a percentage of net sales represented 9.8% compared with 9.7% in 1H19.
In 1H20 we had other expenses of $212.0 million, compared with other expenses of $3.4 million reported in 1H19.
Operating income in 1H20 was $686.8 million, which represents an operating margin of 2.1%, a decrease of 72.5% from an operating income of $2,498.9 million and an operating margin of 8.0% in 1H19.
The net financial income in 1H20 was $2,304.2 million, higher when compared to a net financial income of $167.6 million in 1H19 mainly as a result of the Mexican peso depreciation year over year.
Total taxes were $849.1 million as of June 30, 2020. These taxes include $502.9 million of income tax and $346.2 million of deferred income taxes. This figure compares to total taxes of $772.1 million in 1H19.
All the above resulted in a net income of $2,141.9 million or 6.7% of net margin in the 1H20, which represents $3.55 pesos of earnings per share; while in the 1H19 the net income totaled $1,894.4 million, 6.1% of net margin and $3.15 pesos of net income per share.
EBITDA | |||||
In millions of pesos | 1H20 | 1H19 | Change | ||
$ | $ | $ | % | ||
Net controlling interest profit | 2,131.8 | 1,887.6 | 244.2 | 12.9 | |
Income tax expense (benefit) | 849.1 | 772.1 | 77.0 | 10.0 | |
Result in associates | 10.1 | 6.8 | 3.3 | 48.1 | |
Net finance (income) expense | (2,304.2) | (167.6) | (2,136.7) | 1,275.1 | |
Depreciation and amortization | 698.1 | 639.3 | 58.8 | 9.2 | |
EBITDA | 1,384.9 | 3,138.2 | (1,753.3) | (55.9) | |
EBITDA Margin (%) | 4.3% | 10.1% | - | - | |
Net revenues | 32,170.3 | 31,207.7 | 962.6 | 3.1 | |
EBITDA in 1H20 reached $1,384.9 million, representing an EBITDA margin of 4.3%, compared to an EBITDA of $3,138.2 million in 1H19, with a margin of 10.1%.
BALANCE SHEET
BALANCE SHEET DATA | |||||
In millions of pesos | June 30, 2020 | Dec. 31st, 2019 | Change | ||
$ | $ | $ | % | ||
TOTAL ASSETS | 58,387.5 | 55,702.5 | 2,685.0 | 4.8 | |
Cash and cash equivalents | 17,817.6 | 19,182.9 | (1,365.3) | (7.1) | |
Accounts receivable | 4,675.1 | 3,880.8 | 794.3 | 20.5 | |
TOTAL LIABILITIES | 15,417.0 | 15,442.2 | (25.1) | (0.2) | |
Accounts payable | 5,390.7 | 5,235.5 | 155.2 | 3.0 | |
Short-term debt | 1,107.6 | 3,440.4 | (2,332.8) | (67.8) | |
Long-term debt | 1,487.1 | 1,488.2 | (1.1) | (0.1) | |
TOTAL STOCKHOLDERS' EQUITY | 42,970.5 | 40,260.3 | 2,710.2 | 6.7 | |
Capital stock | 1,174.3 | 1,174.3 | (0.1) | (0.0) | |
Cash and equivalents as of June 30, 2020 totaled $17,817.6 million vs $19,182.9 million as of December 31, 2019.
Total debt as of June 30, 2020 was $2,594.7 million, compared to $4,928.6 million reported as of December 31, 2019, mainly as a result of payments made in our short-term bank debt.
Net cash as of June 30, 2020 was $15,222.9 million, compared to net cash of $14,254.3 million as of December 31, 2019.
CAPITAL EXPENDITURES | |||||
In millions of pesos | 1H20 | 1H19 | Change | ||
$ | $ | $ | % | ||
Capital Expenditures | 992.4 | 824.6 | 167.9 | 20.4 | |
Total CAPEX for the 1H20 was $992.4 million and $824.6 million in 1H19, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION | ||
As of June 30, 2020 | ||
Total Shares | 600,000,000 | |
Total free float | 26.75% | |
Market cap (millions of pesos) | $40,248 | |
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 | |||||||
June | 69.75 | 65.32 | 67.08 | 39.01 | 34.70 | 35.17 | |||||||
May | 69.93 | 66.18 | 67.87 | 36.94 | 32.85 | 36.64 | |||||||
April | 69.93 | 60.81 | 69.93 | 35.09 | 29.80 | 34.88 | |||||||
March | 71.07 | 58.76 | 67.48 | 44.14 | 28.67 | 34.00 | |||||||
February | 75.83 | 68.57 | 71.07 | 48.87 | 42.67 | 43.04 | |||||||
January | 82.40 | 75.01 | 75.82 | 52.70 | 47.78 | 48.34 | |||||||
ANALYST COVERAGE
Institution | Analyst name | |
ACTINVER | José Antonio Cebeira | jcebeira@actinver.com.mx |
BBVA BANCOMER | Pablo Abraham Peregrina | pablo.abraham@bbva.com |
GBM | Miguel Tortolero | matortolero@gbm.com.mx |
INTERCAM | Richard Horbach Martinez | rhorbach@intercam.com.mx |
INVEX | Giselle Mojica | gmojica@invex.com |
JP MORGAN | Ulises Argote | ulises.argote@jpmorgan.com |
SANTANDER | Hector Maya López | hmmaya@santander.com.mx |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $22.96 per USD $1.0, which corresponds to the rate at the close of June 30, 2020, 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 | 2020 | 2020 | 2019* |
TOTAL ASSETS | $ 2,543.0 | 58,387.5 | 55,702.5 |
Total current assets | 1,413.6 | 32,456.1 | 31,097.2 |
Cash and cash equivalents | 776.0 | 17,817.6 | 19,182.9 |
Total accounts receivable | 203.6 | 4,675.1 | 3,880.8 |
Inventories | 378.3 | 8,684.8 | 6,753.4 |
Other current assets | 55.7 | 1,278.6 | 1,280.1 |
Total non current assets | 1,129.4 | 25,931.4 | 24,605.2 |
Net property, plant and equipment | 837.9 | 19,237.0 | 18,556.6 |
Other non current Assets | 291.6 | 6,694.4 | 6,048.6 |
TOTAL LIABILITIES | $ 671.5 | 15,417.0 | 15,442.2 |
Total current liabilities | 361.8 | 8,306.7 | 8,908.1 |
Notes payable to banks | 48.2 | 1,107.6 | 3,440.4 |
Accounts payable | 234.8 | 5,390.7 | 5,235.5 |
Other taxes payable and other accruals | 78.8 | 1,808.4 | 232.2 |
Total long-term liabilities | 309.7 | 7,110.3 | 6,534.0 |
Long-term debt | 64.8 | 1,487.1 | 1,488.2 |
Other non current liabilities | 51.2 | 1,176.2 | 1,141.3 |
Deferred income taxes | 193.7 | 4,447.0 | 3,904.5 |
TOTAL STOCKHOLDERS' EQUITY | $ 1,871.5 | 42,970.5 | 40,260.3 |
Capital stock | 51.1 | 1,174.3 | 1,174.3 |
Commission in shares issued | 18.1 | 414.5 | 414.5 |
Retained earnings | 1,710.4 | 39,270.0 | 37,732.9 |
Others accounts | 80.5 | 1,847.5 | 858.2 |
Non controlling interest | 11.5 | 264.2 | 80.4 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,543.0 | 58,387.5 | 55,702.5 |
*Audited | |||
CONSOLIDATED STATEMENT OF INCOME | |||
Second Quarter Results, ended June 30th: | |||
-Unaudited- | |||
U.S. Dollar | |||
In millions pesos | 2020 | 2020 | 2019* |
Net sales | $ 715.7 | 16,431.9 | 16,884.1 |
Cost of sales | 634.8 | 14,574.5 | 13,164.5 |
Gross profit | 80.9 | 1,857.4 | 3,719.6 |
SG&A | 68.3 | 1,567.0 | 1,550.8 |
Other income (expenses), net | (9.0) | (207.5) | (5.0) |
Operating income | 3.6 | 82.8 | 2,163.8 |
Net finance income | (5.3) | (122.3) | 91.6 |
Income tax | (0.5) | (11.2) | 663.4 |
Net Income | -$ 1.2 | (28.2) | 1,591.9 |
Non-controlling interest | 0.29 | 6.6 | 3.1 |
Net controlling interest profit | (1.52) | (34.8) | 1,588.8 |
Basic and diluted earnings per share | (0.00) | (0.06) | 2.65 |
Basic and diluted earnings per ADR | (0.03) | (0.70) | 31.78 |
Weighted average Shares outstanding1 | 599,787 | 599,787 | 600,000 |
EBITDA Result | $ 19.1 | 437.6 | 2,483.3 |
Gross margin | 11.3% | 11.3% | 22.0% |
Operating margin | 0.5% | 0.5% | 12.8% |
Net margin | -0.2% | -0.2% | 9.4% |
EBITDA margin | 2.7% | 2.7% | 14.7% |
1 In thousands | |||
* Audited | |||
CONSOLIDATED STATEMENT OF INCOME | |||
Accumulated results, for the six months ended June 30. | |||
-Unaudited- | |||
U.S. Dollar | |||
In millions pesos | 2020 | 2020 | 2019* |
Net sales | $ 1,401.1 | 32,170.3 | 31,207.7 |
Cost of sales | 1,225.3 | 28,131.8 | 25,680.2 |
Gross profit | 175.9 | 4,038.5 | 5,527.5 |
Selling, general and administrative expenses | 136.7 | 3,139.7 | 3,025.2 |
Other income (expenses), net | (9.2) | (212.0) | (3.4) |
Operating income | 29.9 | 686.8 | 2,498.9 |
Net finance income | 100.4 | 2,304.2 | 167.6 |
Income tax | 37.0 | 849.1 | 772.1 |
Net income | $ 93.3 | 2,141.9 | 1,894.4 |
Non-controlling interest | 0.4 | 10.1 | 6.8 |
Net controlling interest profit | 92.8 | 2,131.8 | 1,887.6 |
Basic and diluted earnings per share | 0.15 | 3.55 | 3.15 |
Basic and diluted earnings per ADR | 1.86 | 42.6 | 37.75 |
Weighted average Shares outstanding1 | 599,815 | 599,815 | 599,960 |
EBITDA Result | $ 60.3 | 1,384.9 | 3,138.2 |
Gross margin | 12.6% | 12.6% | 17.7% |
Operating margin | 2.1% | 2.1% | 8.0% |
Net margin | 6.6% | 6.7% | 6.1% |
EBITDA margin | 4.3% | 4.3% | 10.1% |
1 In thousands | |||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||
In million of pesos | |||
-Unaudited- | |||
U.S. Dollar | June 30, | ||
2020 | 2020 | 2019* | |
NET MAJORITY INCOME BEFORE INCOME TAX | $ 130.3 | 2,991.0 | 2,666.5 |
ITEMS RELATING TO INVESTING ACTIVITIES: | 30.8 | 706.8 | 269.4 |
Depreciation and others | 38.1 | 875.4 | 639.3 |
Income (loss) on sale of plant and equipment | 4.2 | 96.8 | (23.1) |
Other Items | (11.6) | (265.4) | (346.7) |
NET CASH GENERATED FROM NET INCOME BEFORE TAXES | 161.1 | 3,697.9 | 2,935.9 |
CASH GENERATED OR USED IN THE OPERATION: | (78.8) | (1,808.8) | (1,977.9) |
Decrease (increase) in accounts receivable | (30.4) | (698.6) | (1,426.1) |
Decrease (increase) in inventories | (87.0) | (1,998.0) | 395.7 |
Increase (decrease) in accounts payable | 60.0 | 1,377.3 | (1,961.8) |
Other Items | (21.3) | (489.6) | 1,014.3 |
NET CASH FLOW FROM OPERATING ACTIVITIES | 82.3 | 1,889.0 | 958.0 |
NET CASH FLOW FROM INVESTING ACTIVITIES | (26.0) | (596.7) | (188.6) |
Acquisition of property, plant and equipment | (36.2) | (831.1) | (824.6) |
Proceeds from sales of property plant and equipment | 1.5 | 34.7 | 37.3 |
Other Items | 8.7 | 199.7 | 598.7 |
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES | 56.3 | 1,292.3 | 769.4 |
Net cash provided by financing activities: | (117.0) | (2,686.5) | (706.5) |
Proceeds from loans | 107.1 | 2,459.7 | 3,478.6 |
Principal payments on loans | (224.7) | (5,159.1) | (3,424.2) |
Dividends paid | (17.2) | (395.8) | (420.0) |
Other items | 17.8 | 408.7 | (340.9) |
Net increase (decrease) in cash and equivalents | (60.7) | (1,394.2) | 62.9 |
Cash and investments at the beginning of year | $ 834.7 | 19,164.8 | 18,451.9 |
CASH AND INVESTMENTS AT END OF PERIOD | $ 774.0 | 17,770.6 | 18,514.8 |
DERIVATIVES POSITION REPORT
Second Quarter 2020 | ||||||||||
Thousands of Mexican Pesos, as of June 30, 2020 | ||||||||||
TYPE OF FINANCIAL INSTRUMENT | OBJECTIVE | NOTIONAL | VALUE OF THE RELATED COMMODITY | REASONABLE VALUE | AMOUNTS DUE BY YEAR | GUARANTIES REQUIRED | ||||
2Q-2020 | 1Q-2020 | 2Q-2020 | 1Q-2020 | |||||||
Forward Vanilla and KO Fwd | Hedge | $ 47,259 | $ 22.96 | $ 23.80 | $ 25,897 | $ 111,955 | 100% in 2020 | The deals consider the possibility of margin calls but not another kind of guarantee | ||
Futures for corn and soybean meal | Hedge | $ 418,173 | CORN | CORN | $ 2,944 | -$ 33,818 | 83% in 2020 and 17% in 2021 | |||
In USD per Bushel | In USD per Bushel | |||||||||
month | price | month | price | |||||||
Sep-20 | $ 3.415 | May-20 | $ 3.408 | |||||||
Dec-20 | $ 3.505 | Jul-20 | $ 3.460 | |||||||
Mar-21 | $ 3.613 | Sep-20 | $ 3.498 | |||||||
May-21 | $ 3.675 | Dec-20 | $ 3.575 | |||||||
Jul-21 | $ 3.728 | Mar-21 | $ 3.685 | |||||||
Sep-21 | $ 3.668 | May-21 | $ 3.745 | |||||||
Dec-21 | $ 3.730 | Jul-21 | $ 3.775 | |||||||
Dec-21 | $ 3.775 | |||||||||
SOYBEAN MEAL | SOYBEAN MEAL | |||||||||
In USD per ton | In USD per ton | |||||||||
month | price | month | price | |||||||
Aug-20 | $ 289.1 | Jul-20 | $ 318.9 | |||||||
Sep-20 | $ 291.4 | Aug-20 | $ 314.0 | |||||||
Oct-20 | $ 292.9 | Jan-21 | $ 305.4 | |||||||
Dec-20 | $ 295.9 | Mar-21 | $ 295.8 | |||||||
Jan-21 | $ 296.3 | May-21 | $ 293.0 | |||||||
Mar-21 | $ 295.3 | Jul-21 | $ 294.9 | |||||||
May-21 | $ 294.5 | Aug-21 | $ 295.0 | |||||||
Aug-21 | $ 297.3 | Sep-21 | $ 294.0 | |||||||
Sep-21 | $ 297.2 | Oct-21 | $ 291.7 | |||||||
Oct-21 | $ 296.1 | Dec-21 | $ 292.5 | |||||||
Options of Corn | Hedge | $ 131,020 | CORN | CORN | $ 4,496 | $ 1,912 | 60% in 2020 and 40% in 2021 | |||
In USD per Bushel | In USD per Bushel | |||||||||
month | price | month | price | |||||||
Sep-20 | $ 3.415 | May-20 | $ 3.408 | |||||||
Dec-20 | $ 3.505 | Jul-20 | $ 3.460 | |||||||
Mar-21 | $ 3.613 | Sep-20 | $ 3.498 | |||||||
May-21 | $ 3.675 | Dec-20 | $ 3.575 | |||||||
Mar-21 | $ 3.685 | |||||||||
Options of soybean meal | Hedge | $ 136,570 | SOYBEAN MEAL | SOYBEAN MEAL | $ 1,571 | $ 4,059 | 52% in 2020 and 48% in 2021 | |||
In USD per ton | In USD per ton | |||||||||
month | price | month | price | |||||||
Ago-20 | $ 289.1 | May-20 | $ 321.5 | |||||||
Sep-20 | $ 291.4 | Jul-20 | $ 318.9 | |||||||
Oct-20 | $ 292.9 | Aug-20 | $ 314.0 | |||||||
Dec-20 | $ 295.9 | Sep-20 | $ 310.0 | |||||||
Jan-21 | $ 296.3 | Oct-20 | $ 308.0 | |||||||
Mar-21 | $ 295.3 | Dec-20 | $ 308.4 | |||||||
May-21 | $ 294.5 | Jan-21 | $ 305.4 | |||||||
Jul-21 | $ 296.5 | Mar-21 | $ 295.8 | |||||||
-The total financial instruments do not exceed 5% of total assets as of June 30, 2020. | ||||||||||
-The notional value represents the net position as of June 30, 2020 at the exchange rate of Ps. 22.96 per one dollar. | ||||||||||
-A negative value means an unfavorable effect for the Company. | ||||||||||
PROBABLE SCENARIO
Second Quarter 2020 | ||||||||
Thousands of Mexican Pesos, as of June 30, 2020 | 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 (1) | ||||||||
-2.5% | 2.5% | 5.0% | -2.5% | 2.5% | 5.0% | |||
Forward Vanilla and KO Fwd | $ 25,897 | $22.39 | $ 23.53 | $ 24.11 | Direct | -$ 1,230 | $ 53,023 | $ 76,457 |
-5% | 5% | 10% | -5% | 5% | 10% | |||
Futures of Corn: (2) | $ 2,944 | $ 3.244 | $ 3.586 | $ 3.757 | The effect will materialize as the inventory is consumed | -$ 17,965 | $ 23,853 | $ 44,761 |
Futures of Soybean Meal: (2) | $ 274.6 | $ 303.6 | $ 318.0 | |||||
Options for Corn | $ 4,496 | $ 3.244 | $ 3.586 | $ 3.757 | -$ 2,055 | $ 11,047 | $ 17,598 | |
Options of Soybean Meal | $ 1,571 | $ 274.6 | $ 303.6 | $ 318.0 | -$ 5,258 | $ 8,399 | $ 15,228 | |
(1) The reference value is the exchange rate of Ps. $22.96 per USD as of June 30, 2020. | ||||||||
(2) The reference values are; the future of corn for Sep 2020, $3.4150 USD/bushel and the future of soybean meal for Aug 2020, $289.10 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 2020 | ||||||||||
Thousands of Mexican Pesos, as of June 30, 2020 | 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 and KO Fwd | $ 25,897 | $11.48 | $17.22 | $28.70 | $34.44 | Direct | -$516,637 | -$245,370 | $163,432 | $317,878 |
CONFERENCE CALL INFORMATION
The Company will host its second quarter 2020 earnings call, on Tuesday, July 28th, 2020. 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: http://web.meetme.net/r.aspx?p=12&a=UIVgpWaiclxYVu
Confirmation Number: 49812766
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 28,000 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.
IR contact information:
maria.jaquez@bachoco.net
andrea.guerrero@bachoco.net
T. +52(461)618 3555
View original content:http://www.prnewswire.com/news-releases/industrias-bachoco-announces-second-quarter-2020-results-301100331.html
SOURCE Industrias Bachoco, S.A.B. de C.V.
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