October 29, 2012

Bachoco releases financial results for Q3 of 2012

Industrias Bachoco S.A.B. reveals its unaudited outcome for the third quarter 2012 and the January-September period concluding on September 30, 2012.

All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS").

Net sales increased 52.0%. EBITDA margin reached 9.6%. Earnings per share totalled MXN1.05 (US$0.08) in Q3 of 2011.

The company's Q3 2012 net sales is 52.0% higher than Q3 of 2011. This resulted from strong increases in sales across all business lines. In particular, chicken sales increased year-over-year mainly as a result of the integration of Bachoco's US subsidiary "OK Foods", which was consolidated in November 2011.

The company's production costs continued to be negatively impacted by persistently high input costs, primarily grain and soy meal.

Gross profit in Q3 2012 was MXN1,558.4 million (US$1.2 billion) resulting in a gross margin of 15.7 % compared to a margin of 8.6% in Q3 of 2011. Meanwhile, gross margin totaled 15.4% in Jan-Sep 2012, compared to 12.0% in the same period 2011.

In Q3 of 2012, total expenses represented 8.5% over total sales, compared to 10.9% over total sales in 3Q11.  This was as a result of strict expense control across all of Bachoco's operations.

EBITDA in Q3 2012 reached a margin of 9.6%, compared to a margin of 0.4% in Q3 of 2011. EBITDA margin in Jam-Sep 2012 was 9.3%, compared to 3.8% reported in the same period 2011.

The comprehensive financial result was income of MXN19.9 million (US$1.53 million) in Q3 2012, and MXN113.3 million (US$9 million) in the first nine months 2012. This was mainly due to interest earned on the Bachoco's cash position.

"Bachoco's third quarter results were sound, due to an adequate balance between supply and demand in the company's main business lines, improvements in production efficiencies as a result of investments in productivity projects, as well as a reduction in operating expenses as a percentage of sales, which allowed Bachoco to offset cost increases, which have been driven by sustained raw materials price increases.

The company was able to sell all of its chicken and egg production, and recovered a portion of price lags within these business lines.

In addition, Bachoco's US complex continued to operate with positive results, with its integration into the company in-line with Bachoco's overall strategy.

Furthermore, the company successfully issued its first local bond during the third quarter, which will be mainly used to pre-pay some debt as well as to diversify and make the company's debt structure more efficient. It is worth nothing that the company's financial position remains strong, with negative debt net."

Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally.