U.S. Markets open in 2 hrs 11 mins

Industrias Bachoco Announces Second Quarter 2019 Results

CELAYA, Mexico, July 22, 2019 /PRNewswire/ -- Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the second quarter ("2Q19") and first half ("1H19") 2019 ended on June 30, 2019. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").

HIGHLIGHTS 2019

  • Net sales increased 4.1% in 2Q19 and decreased 1.0% in 1H19
  • EBITDA margin was 14.7% for 2Q19 and 10.1% in 1H19

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This second quarter, we observed good levels of demand, particularly in Mexico. This led to improvements in prices for the poultry industry, which is in line with its seasonal behavior.

This improvement in prices, particularly in our poultry business line, allowed us to reach an increase in total sales of 4.1% for 2Q19 when compared to the same period of 2018. This effect, in combination with a lower cost of sales in terms of unit cost, led us to a gross margin of 22% for 2Q19 compared to the 19.2% of 2Q18.

We managed to keep our SG&A under control as a percentage of sales, 9.2% for the quarter and 9.7% for the first half of 2019 which is in line with the values reported for the same periods of 2018.

As a result, our operating profit for the quarter was $2,163.8 million which is 30.6% higher than the $1,656.4 million reported in 2Q18.

We reported and EBITDA of $2,483.3 million in 2Q19 which is 25.7% higher than the $1,976.0 million reported in 2Q18, that is 14.7% and 12.2% EBITDA margin for each period respectively. For the first half of the year our EBITDA margin was 10.1%, compared to 13.0% EBITDA margin of the same period of 2018.

We continue to keep focus on adding value to our shareholders. In 2Q19 we reported earnings per share of $2.65 compared to $2.62 of 2Q18; for the first half of 2019 we reported earnings per share of $3.15 compared to $4.72 for 1H18.

Our financial position remains solid.  By the end of the quarter we reported a net cash of $13,560 million which is allowing us to continue with our growth plans."

EXECUTIVE SUMMARY
The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2018.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net Sales


16,884.1

16,213.6

670.5

4.1

Net sales in Mexico


12,537.4

11,553.9

983.4

8.5

Net sales in the U.S.


4,346.7

4,659.7

(313.0)

(6.7)

 

NET SALES BY SEGMENT





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net Sales


16,884.1

16,213.6

670.5

4.1

Poultry


15,259.2

14,731.9

527.3

3.6

Other


1,624.9

1,481.7

143.2

9.7

 

NET VOLUME SOLD BY SEGMENT

In tons



Change


2Q19

2Q18

Volume

%

Total sales volume:

575,729

551,287

24,442.1

4.4

Poultry

436,570

431,315

5,254.8

1.2

Others

139,159

119,972

19,187.3

16.0






The Company's 2Q19 net sales totaled $16,884.1 million; $670.5 million or 4.1% more than   $16,213.6 million reported in 2Q18.  The increase is a result of better prices in poultry and higher volume sold in poultry and balanced feed.

In 2Q19, sales of our U.S. operations represented 25.8% of our total sales compared to 28.7% in 2Q18.

GROSS PROFIT





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Cost of sales


13,164.5

13,108.3

56.2

0.43

Gross profit


3,719.6

3,105.3

614.3

19.78

Gross margin


22.0%

19.2%

-

-

In 2Q19, cost of sales was $13,164.5 million; $56.2 million or 0.43% higher than $13,108.3 million reported in 2Q18. This increase was due higher volume sold.

The Company´s gross profit in 2Q19 was $3,719.6 million, 19.8% higher than the gross profit of $3,105.3 million in 2Q18, with a gross margin of 22.0% for 2Q19 vs 19.2% in 2Q18. This is a result of higher prices in poultry.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")

 

In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Total SG&A


1,550.8

1,489.1

61.7

4.1

Total SG&A expenses in 2Q19 were $1,550.8 million; $61.7 million higher than the $1,489.1 million reported in 2Q18. Total SG&A expenses as a percentage of net sales represented 9.2% in 2Q19 and 9.2% in 2Q18.

OTHER INCOME (EXPENSE), NET

In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Other income (expense), net


(5.0)

40.2

(45.2)

(112.5)

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 2Q19, we recorded other expenses of $5.0 million, compared with other income of $40.2 million reported in 2Q18.

OPERATING INCOME





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Operating income


2,163.8

1,656.4

507.4

30.6

Operating margin


12.8%

10.2%

-

-

Operating income in 2Q19 totaled $2,163.7 million; $507.4 million higher than $1,656.4 million reported in 2Q18. This represents an operating margin of 12.8% for 2Q19, higher when compared to the same period of 2018. The increase in operating income is mainly attributed to higher poultry prices in 2Q19.


NET FINANCIAL INCOME





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net Financial Income


91.6

562.1

(470.6)

(83.7)

Financial Income


184.4

312.8

(128.4)

(41.0)

Financial Expense


92.8

(249.3)

342.2

(137.2)

In 2Q19, the Company reported net financial income of $91.6 million, compared to $562.1 million reported in the same period of 2018. The decrease is mainly attributed to lower exchange rate gains, as the peso appreciated during the quarter.

TAXES FOR THE PERIOD





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Total Taxes


663.4

641.8

21.6

3.4

Income tax


652.2

563.2

89.1

15.8

Deferred income tax


11.2

78.7

(67.5)

(85.8)

Total taxes for the 2Q19 were $663.4 million, compared with total taxes of $641.8 million in the same period of 2018.

NET INCOME





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net income


1,591.9

1,576.7

15.2

1.0

Net margin


9.4%

9.7%

-

-

Basic and diluted earnings per share1


2.65

2.62

0.0

n/a

Basic and diluted earnings per ADR2


31.78

31.49

0.3

n/a

Weighted average Shares outstanding3


600,000

600,000

-

-

1 In pesos

2  In pesos, one ADR equals to twelve shares

3  In thousands of shares

The net income for 2Q19 was $1,591.9 million, representing a basic and diluted income of $2.65 pesos per share, compared with a net income of $1,576.9 million, which represented $2.62 pesos of net income per share in 2Q18.  This increase is mainly attributed to higher operating results. Net margin in 2Q19 was 9.4% compared to 9.7% reported in 2Q18.

EBITDA



In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net income


1,588.8

1,574.3

14.5

0.9

   Income tax expense (benefit)


663.4

641.8

21.6

3.4

   Result in associates


3.1

2.3

0.7

31.0

   Net finance (income) expense


(91.6)

(562.1)

470.6

(83.7)

   Depreciation and amortization


319.6

319.6

(0.0)

(0.0)

EBITDA


2,483.3

1,976.0

507.4

25.7

EBITDA Margin (%)


14.7%

12.2%

-

-

Net revenues


16,884.1

16,213.6

670.5

4.1

EBITDA in 2Q19 reached $2,483.3 million representing an EBITDA margin of 14.7%, compared to an EBITDA of $1,976.0 million in 2Q18, with an EBITDA margin of 12.2%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY





In millions of pesos


1H19

1H18

Change



$

$

$

%

Net Sales


31,207.7

31,516.6

(308.9)

(1.0)

Net sales in Mexico


22,834.0

22,645.4

188.6

0.8

Net sales in the U.S.


8,373.8

8,871.2

(497.4)

(5.6)

 

NET SALES BY SEGMENT





In millions of pesos


1H19

1H18

Change



$

$

$

%

Net Sales


31,207.7

31,516.6

(308.9)

(1.0)

Poultry


28,112.0

28,490.6

(378.6)

(1.3)

Other


3,095.7

3,026.0

69.7

2.3

 

NET VOLUME SOLD BY SEGMENT

In metric tons





Change


1H19

1H18

Volume

%

Total sales volume:

1,128,905

1,098,037

30,867

2.81

Poultry

862,315

853,496

8,819

1.03

Others

266,589

244,541

22,049

9.02








During the first half of 2019, net sales totaled $31,207.7 million; $308.9 million or 1.0% less than $31,516.6 million reported in the same period of 2018. The decrease in sales is mainly attributable to lower prices in our main product lines when compared to the first half of 2018.

In 1H19, sales of our U.S. operations represented 26.8% of our total sales, compared with 28.1% in 1H18.

OPERATING RESULTS





In millions of pesos


1H19

1H18

Change



$

$

$

%

Cost of Sales


25,680.2

25,194.1

486.1

1.9

Gross Profit


5,527.5

6,322.5

(795.0)

(12.6)

Total SG&A


3,025.2

2,874.6

150.6

5.2

Other Income (expense)


(3.4)

31.0

(34.4)

(111.0)

Operating Income


2,498.9

3,478.9

(979.9)

(28.2)

Net Financial Income


167.6

468.4

(300.8)

(64.2)

Income Tax


772.1

1,109.6

(337.6)

(30.4)

Net Income


1,894.4

2,837.6

(943.2)

(33.2)

In 1H19, the cost of sales totaled $25,680.2 million; $486.1 million or 1.9% higher than $25,194.1 million reported in 1H18. The increase in cost of sales is mainly attributed to higher volume sold.

As a result, we reached a gross profit of $5,527.5 million and a gross margin of 17.7% in 1H19, when compare to $6,322.5 million of gross profit and a margin of 20.1% reached in the same period of 2018.

Total SG&A expenses in 1H19 were $3025.2 million; $150.6 million or 5.2% more than the $2,874.6 million reported in 1H18. In 1H19 total SG&A expenses as a percentage of net sales represented 9.7% compared with 9.1% in 1H18.

In 1H19 we had other expenses of $3.4 million, compared with other income of $31.0 million reported in 1H18.

The operating income in 1H19 was $2,498.9 million, which represents an operating margin of 8.0%, a decrease of 28.2% from an operating income of $3,478.9 million and an operating margin of 11.0% in 1H18.

The net financial income in 1H19 was $167.6 million, lower when compared to a net financial income of $468.4 million in 1H18. 

Total taxes were $772.1 million as of June 30, 2019.  These taxes include $701.6 million of income tax and $70.5 million of deferred income taxes. This figure compares to total taxes of $1,109.6 million in 1H18; the decrease was mainly attributed to a lower income before taxes.

All the above resulted in a net income of $1,894.4 million or 6.1% of net margin in the 1H19, which represents $3.15 pesos of earnings per share; while in the 1H18 the net income totaled $2,837.6 million, 9.0% of net margin and $4.72 pesos of net income per share.

EBITDA





In millions of pesos


1H19

1H18

Change



$

$

$

%

Net controlling interest profit


1,887.6

2,830.0

(942.4)

(33.3)

   Income tax expense (benefit)


772.1

1,109.6

(337.6)

(30.4)

   Result in associates


6.8

7.6

(0.8)

(10.4)

   Net finance (income) expense


(167.6)

(468.4)

300.8

(64.2)

   Depreciation and amortization


639.3

629.3

10.0

1.6

EBITDA


3,138.2

4,108.2

(970.0)

(23.6)

EBITDA Margin (%)


10.1%

13.0%

-

-

Net revenues


31,207.7

31,516.6

(308.9)

(1.0)

EBITDA in 1H19 reached $3,138.2 million, representing an EBITDA margin of 10.1%, compared to EBITDA of $4,108.2 million in 1H18, with an EBITDA margin of 13.0%.

BALANCE SHEET

BALANCE SHEET DATA





In millions of pesos


June 30, 2018

Dec. 31st, 2018

Change



$

$

$

%

TOTAL ASSETS


54,826.4

52,865.6

1,960.8

3.7

Cash and cash equivalents


18,553.1

18,458.5

94.6

0.5

Accounts receivable


4,909.9

3,486.5

1,423.4

40.8

TOTAL LIABILITIES


15,727.3

14,699.9

1,027.4

7.0

Accounts payable


3,554.1

4,228.4

(674.3)

(15.9)

Short-term debt


3,440.2

3,492.8

(52.6)

(1.5)

Long-term debt


1,552.8

1,544.8

8.0

0.5

TOTAL STOCKHOLDERS' EQUITY


39,099.1

38,165.7

933.4

2.4

Capital stock


1,174.4

1,174.3

0.1

0.0

Cash and equivalents as of June 30, 2019 totaled $18,553.1 million vs $18,458.6 million as of December 31, 2018.

Total debt as of June 30, 2019 was $4,993.0 million, compared to $5,037.6 million reported as of December 31, 2018, mainly as a result of higher long-term bank debt.

Net cash as of June 30, 2019 was $13,560.0 million, compared to net cash of $13,420.9 million as of December 31, 2018.

CAPITAL EXPENDITURES

In millions of pesos


1H19

1H18

Change



$

$

$

%

Capital Expenditures


824.6

780.5

44.1

5.6

Total CAPEX for the 1H19 was $824.6 million and $780.5 million in 1H18, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of June 28, 2019

Total Shares


600,000,000

Total free float


26.75%

Market cap (millions of pesos)


$48,240

Source: Yahoo Finances

SHARE PRICE

SHARE PRICE

 




Mexican Stock Exchange


The New York Stock Exchange



Ticker Symbol: Bachoco


Ticker Symbol: IBA



In nominal pesos per Share


In U.S. Dollar per ADR


Month

High

Low

Close


High

Low

Close


Jun-19

84.98

79.99

80.40


52.92

50.11

50.67


May-19

87.22

77.68

86.25


55.01

49.42

52.50


Apr-19

78.67

71.14

77.68


49.75

45.23

49.00


Mar-19

75.88

70.51

74.59


47.98

45.72

46.10


Feb-19

76.06

72.83

74.84


47.74

45.17

46.93


Jan-19

74.37

65.38

73.31


46.53

40.07

46.00


ANALYST COVERAGE

Institution

Analyst name

E-mail

ACTINVER

José Antonio Cebeira

jcebeira@actinver.com.mx

APALACHE ANALISIS

Jorge Placido

jorge.placido@apalache.mx

BBVA BANCOMER

Pablo Abraham Peregrina

pablo.abraham@bbva.com

GBM

Miguel Tortolero

matortolero@gbm.com.mx

INVEX

Giselle Mojica

gmojica@invex.com

JPMORGAN

Ulises Argote

ulises.argote@jpmorgan.com

MIRANDA-GR

Martin Lara

martin.lara@miranda-gr.com

SANTANDER

Luis Miranda

lmiranda@santander.com.mx

APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $19.20 per USD $1.0, which corresponds to the rate at the close of June 30, 2019, 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

2019

2019

2018*





TOTAL ASSETS

$           2,855.5

54,826.4

52,865.6





Total current assets

1,584.7

30,426.4

29,775.0

   Cash and cash equivalents

966.3

18,553.1

18,458.5

   Total accounts receivable

255.7

4,909.9

3,486.5

   Inventories

321.2

6,166.1

6,649.1

   Other current assets

41.5

797.3

1,180.9





Total non current assets

1,270.8

24,400.1

23,090.6

   Net property, plant and equipment

944.3

18,129.9

18,018.2

   Other non current Assets

326.6

6,270.1

5,072.4





TOTAL LIABILITIES

$              819.1

15,727.3

14,699.9





Total current liabilities

478.2

9,181.4

9,084.9

   Notes payable to banks

179.2

3,440.2

3,492.8

   Accounts payable

185.1

3,554.1

4,228.4

   Other taxes payable and other accruals

113.9

2,187.1

1,363.7





Total long-term liabilities

340.9

6,545.9

5,614.9

   Long-term debt

80.9

1,552.8

1,544.8

   Other  non current liabilities

64.5

1,238.4

302.8

   Deferred income taxes

195.6

3,754.7

3,767.3





TOTAL STOCKHOLDERS' EQUITY

$           2,036.4

39,099.1

38,165.7





Capital stock

61.2

1,174.4

1,174.3

Commission in shares issued

21.6

414.5

414.5

Retained earnings

1,896.3

36,408.4

35,354.5

Others accounts

53.4

1,025.5

1,153.0

Non controlling interest

4.0

76.3

69.5





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$           2,855.5

54,826.4

52,865.6





*Audited








 





CONSOLIDATED STATEMENT OF INCOME


Second Quarter Results, ended June 30th:



-Unaudited-





U.S. Dollar



In millions pesos

2019

2019

2018*

Net sales

$         879.4

16,884.1

16,213.6

Cost of sales

685.7

13,164.5

13,108.3

Gross profit

193.7

3,719.6

3,105.3

SG&A

80.8

1,550.8

1,489.1

Other income (expenses), net

(0.3)

(5.0)

40.2

Operating income

112.7

2,163.8

1,656.4

Net finance income

4.8

91.6

562.1

Income tax

34.6

663.4

641.8

Net Income

$           82.9

1,591.9

1,576.7





Non-controlling interest

0.16

3.1

2.3

Net controlling interest profit

82.8

1,588.8

1,574.3

Basic and diluted earnings per share

0.14

2.65

2.62

Basic and diluted earnings per ADR

1.66

31.78

31.49

Weighted average Shares outstanding1

600,000

600,000

600,000





EBITDA Result

$         129.3

2,483.3

1,976.0





Gross margin

22.0%

22.0%

19.2%

Operating margin

12.8%

12.8%

10.2%

Net margin

9.4%

9.4%

9.7%

EBITDA margin

14.7%

14.7%

12.2%





1 In thousands




* Audited




 





CONSOLIDATED STATEMENT OF INCOME


Accumulated results, for the six months ended  June 30.


-Unaudited-





U.S. Dollar



In millions pesos

2019

2019

2018*

Net sales

$     1,625.4

31,207.7

31,516.6

Cost of sales

1,337.5

25,680.2

25,194.1

Gross profit

287.9

5,527.5

6,322.5

Selling, general and administrative expenses

157.6

3,025.2

2,874.6

Other income (expenses), net

(0.2)

(3.4)

31.0

Operating income

130.2

2,498.9

3,478.9

Net finance income

8.7

167.6

468.4

Income tax

40.2

772.1

1,109.6

Net income

$           98.7

1,894.4

2,837.6





Non-controlling interest

0.4

6.8

7.6

Net controlling interest profit

98.3

1,887.6

2,830.0

Basic and diluted earnings per share

0.16

3.15

4.72

Basic and diluted earnings per ADR

1.97

37.8

56.60

Weighted average Shares outstanding1

599,960

599,960

599,990





EBITDA Result

$         163.4

3,138.2

4,108.2





Gross margin

17.7%

17.7%

20.1%

Operating margin

8.0%

8.0%

11.0%

Net margin

6.0%

6.1%

9.0%

EBITDA margin

10.1%

10.1%

13.0%





1 In thousands




* Audited








 

CONSOLIDATED STATEMENT OF CASH FLOWS




In million of pesos





-Unaudited-











U.S. Dollar

June 30,



2019

2019

2018*







NET MAJORITY INCOME BEFORE INCOME TAX

$                  138.9

2,666.5

3,947.2







ITEMS RELATING TO INVESTING ACTIVITIES:

14.0

269.4

229.3


      Depreciation and others

33.3

639.3

600.7


      Income (loss) on sale of plant and equipment

(1.2)

(23.1)

6.9


      Other Items

(18.1)

(346.7)

(378.4)







NET CASH GENERATED FROM NET INCOME BEFORE TAXES

152.9

2,935.9

4,176.5


CASH GENERATED OR USED IN THE OPERATION:

(103.0)

(1,977.9)

(1,562.8)


   Decrease (increase) in accounts receivable

(74.3)

(1,426.1)

416.6


   Decrease (increase) in inventories

20.6

395.7

(516.2)


   Increase (decrease) in accounts payable

(102.2)

(1,961.8)

(226.5)


   Other Items

52.8

1,014.3

(1,236.7)







NET CASH FLOW FROM OPERATING ACTIVITIES

49.9

958.0

2,613.7







NET CASH FLOW FROM INVESTING ACTIVITIES

(9.8)

(188.6)

(130.1)


      Acquisition of property, plant and equipment

(42.9)

(824.6)

(780.5)


      Proceeds from sales of property plant and equipment

1.9

37.3

11.4


      Other Items

31.2

598.7

639.0







CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES

40.1

769.4

2,483.6







Net cash provided by financing activities:

(36.8)

(706.5)

(774.6)


   Proceeds from loans

181.2

3,478.6

3,177.5


   Principal payments on loans

(178.3)

(3,424.2)

(3,455.1)


   Dividends paid

(21.9)

(420.0)

(426.0)


   Other items

(17.8)

(340.9)

(70.9)


Net increase (decrease) in cash and equivalents

3.3

62.9

1,709.0







Cash and investments at the beginning of year

$                  961.0

18,451.9

17,240.1


CASH AND INVESTMENTS AT END OF PERIOD

$                  964.3

18,514.8

18,949.1







*Audited










DERIVATIVES POSITION REPORT 
















Second Quarter 2019













Thousands of Mexican Pesos, as of June 30, 2019











TYPE OF FINANCIAL INSTRUMENT

OBJECTIVE

NOTIONAL

VALUE OF THE RELATED COMMODITY

REASONABLE VALUE

AMOUNTS DUE BY YEAR

GUARANTIES REQUIRED




2Q-2019

1Q-2019

2Q-2019

1Q-2019




Forward Vanilla

Hedge

$      39,161

$         19.20


$         19.41


$   -11,503

$     -4,655

90% in 2019 and 10% in 2020

The deals consider the possibility of margin calls but not another kind of guarantee




Futures for corn and soybean meal

Hedge

$      192,042

 CORN

 CORN

$        5,654

-$       2,474

60% in 2019; 40% in 2020




 In USD per Bushel

 In USD per Bushel




 month

 price

 month

 price




Mar-20

$           4.395








May-19

$           3.565






Jul-19

$           3.663




Sep-19

$           4.248

Sep-19

$           3.750




Dec-19

$           4.315

Dec-19

$           3.848




 SOYBEAN MEAL

 SOYBEAN MEAL




 In USD per ton

 In USD per ton




 month

 price

 month

 price






May-19

$           306.5






Jul-19

$           310.0




Aug-19

$           315.3

Aug-19

$           311.5




Jan-20

$           324.8

Sep-19

$           313.0




Mar-20

$           327.0






May-20

$           329.0






Jul-20

$           331.0






Aug-20

$           331.4






Sep-20

$           331.6






Options of Corn

Hedge

$      93,363

 CORN

 CORN

$      11,339

-$       2,846

90% in 2019; 10% in 2020




 In USD per Bushel

 In USD per Bushel




 month

 price

 month

 price






May-19

$           3.565




Jul-19

$           3.752

Jul-19

$           3.663




Sep-19

$           4.248

Sep-19

$           3.750




Dec-19

$           4.315

Dec-19

$           3.848




Jan-20

$           4.395

Jan-20

$           3.970




Options of soybean meal

Hedge

$      118,336

 SOYBEAN MEAL

 SOYBEAN MEAL

$        2,738

$             97

80% in 2019; 20% in 2020




 In USD per ton

 In USD per ton




 month

 price

 month

 price






May-19

$           306.5






 Jul-19

$           310.0




Aug-19

$           315.3

Aug-19

$           311.5




Sep-19

$           313.0

Sep-19

$           313.0




Oct-19

$           325.9

Oct-19

$           314.1




Dec-19

$           316.8

Dec-19

$           316.8




Jan-20

$           324.8

Jan-20

$           317.7




Mar-20

$           327.0

Mar-20

$           317.8


















-The total financial instruments do not exceed 5% of total assets as of June 30, 2019.









-The notional value represents the net position as of June 30, 2019 at the exchange rate of Ps. 19.20 per one dollar.







-A negative value means an unfavorable effect for the Company.









PROBABLE SCENARIO












Second Quarter 2019










Thousands of Mexican Pesos, as of June 30, 2019







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

-$            11,503

$18.72

$       19.68

$       20.16

 Direct

-$   30,300

$     7,294

$ 26,091




-5%

5%

10%


-5%

5%

10%


Futures of Corn: (2)

$               5,654

$       4.035

$       4.460

$       4.672

 The effect will materialize as the inventory is consumed

-$     3,948

$   15,256

$ 24,858


Futures of Soybean Meal: (2)

$       299.5

$       331.1

$       346.8


Options for Corn

$             11,339

$       4.035

$       4.460

$       4.672

$     3,518

$   17,086

$ 22,821


Options of Soybean Meal

$               2,738

$       299.5

$       331.1

$       346.8

-$     3,179

$     8,655

$ 14,572












(1) The reference value is the exchange  rate of Ps. $19.20 per USD as of June 30, 2019.






(2) The reference values are; the future of corn for Sep 2019, $4.2475 USD/bushel and the future of soybeanmeal for Ago 2019, $315.3  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 2019












Thousands of Mexican Pesos, as of June 30, 2019








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

-$        11,503

$9.60

$14.40

$24.00

$28.80

 Direct

-$387,444

-$199,474

$176,467

$364,438


























CONFERENCE CALL INFORMATION
The Company will host its second quarter 2019 earnings call, on Tuesday, July 23rd, 2019. 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=UoVIOmhiRjawMt



Confirmation Number: 48818445

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 27,000 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

Cision

View original content:http://www.prnewswire.com/news-releases/industrias-bachoco-announces-second-quarter-2019-results-300888628.html