Industrias Bachoco Announces Third Quarter 2022 Results

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 (“3Q22”) and nine months (“9M22”) ended on September 30, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”), except earnings per share.

HIGHLIGHTS- 2022 vs. 2021

  • Net sales increased 20.9% in 3Q22 and increased 24.5% in 9M22
  • EBITDA margin was 6.2% for 3Q22 and 12.3% for the 9M22
  • SG&A as percentage of net sales was 8.6% and 8.3% for 3Q22 and 9M22 respectively.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “According to the seasonality of our industry, the third quarter usually shows adjustments on margins vs the first half of the year. In that regard, 3Q22 behaved as so.

We observed a decline in prices both in México and the U.S. markets when compared to the first half of 2022. While kept facing the impacts of the increases in cost of sales as a result of higher raw material prices both in USD and Mexican peso terms.

Increases in cost of sales represented 20.3% compared to 3Q22 and 22.7% when compared to the 9M21. Net sales on the other hand showed increases of 20.9% and 24.5% respectively, which is closely following the trend of our input costs.

The combination mentioned above, and the integration of revenue from RYC Alimentos that we have seen since the beginning of 2022, led us to an EBITDA of $1,525.8 million and a margin of 6.2% for the 3Q22 compared to the $1,127.4 million and margin of 5.6% of the same period of 2021. For the nine months of 2022, the EBITDA margin was 12.3%, also higher when compared to 10.7% EBITDA margin of the same period of 2021.

Under a landscape of volatile macroeconomic conditions, we had been able to keep our SG&A under control as a percentage of sales, reporting 8.6% for the quarter which compares to the 8.9% of 3Q21.

As a result, our operating income for 3Q22 was $1,131.2 million which represents a 4.6% margin; this compares to the $738.4 million and 3.7% margin achieved in 3Q21.

The accumulated results of the CAPEX of the nine months of 2022 were $2,954.9 million compared to $2,251.1 million for the same period of 2021. Remaining with a healthy financial for the Company as we reached a net cash level of $16,413.5 million, which will allow us to continue to support our growth plans.”

Executive Summary

The following financial information is expressed in millions of nominal pesos, except for amounts per share and per ADR, with comparative figures for the same periods of 2021.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY

 

 

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Net Sales

 

24,457.8

20,229.0

4,228.8

20.9

Net sales in Mexico

 

17,982.7

14,963.8

3,019.0

20.2

Net sales in the U.S.

 

6,475.0

5,265.2

1,209.8

23.0

NET SALES BY SEGMENT

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

$

Net Sales

 

24,457.8

20,229.0

4,228.8

20.9

Poultry

 

20,890.8

17,765.7

3,125.1

17.6

Other

 

3,567.0

2,463.3

1,103.7

44.8

NET VOLUME SOLD BY SEGMENT

In tons

 

 

 

Change

 

 

3Q22

3Q21

Volume

%

Total sales volume:

 

578,421

570,381

8,039.4

1.4

Poultry

 

433,861

442,665

(8,804.1)

(2.0)

Others

 

144,560

127,716

16,843.4

13.2

   

The Company’s 3Q22 net sales totaled $24,457.8 million; $4,228.8 million or 20.9% more than the $20,229.0 million reported in 3Q21. The increase was mainly a result of higher volume sold in Others and higher prices across the main business lines vs same period of 2021.

In 3Q22, sales of our U.S. operations represented 26.5% of our total sales compared to a 26.0% in the same period of 2021.

GROSS PROFIT

 

 

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Cost of sales

 

21,189.7

17,619.0

3,570.7

20.3

Gross profit

 

3,268.1

2,610.0

658.1

25.2

Gross margin

 

13.4%

12.9%

-

-

In 3Q22, cost of sales was $21,189.7 million; $3,570.7 million or 20.3% higher than the $17,619.0 million reported in 3Q21. This increase was due to higher unit cost in our main business lines as a result of higher raw material prices in USD terms.

The Company´s gross profit in 3Q22 was $3,268.1 million, higher than the gross profit of $2,610.0 million in 3Q21, with a gross margin of 13.4% for 3Q22 vs 12.9% in 3Q21.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Total SG&A

 

2,114.2

1,790.9

323.3

18.1

Total SG&A expenses in 3Q22 were $2,114.2 million; $323.3 million higher than the $1,790.9 million reported in 3Q21. Total SG&A expenses as a percentage of net sales were 8.6% in 3Q22 and 8.9% in 3Q21.

OTHER INCOME (EXPENSE), NET

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Other income (expense), net

 

(22.6)

(80.7)

58.1

(72.0)

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 3Q22, we recorded other expenses of $22.6 million, compared with other expenses of $80.7 million reported in 3Q21.

OPERATING INCOME

 

 

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Operating income

 

1,131.2

738.4

392.8

53.2

Operating margin

 

4.6%

3.7%

-

-

Operating income in 3Q22 totaled $1,131.2 million; $392.8 million higher than the $738.4 million reported in 3Q21. This represents an operating margin of 4.6% for 3Q22, higher when compared to the same period of 2021.

NET FINANCIAL INCOME

 

 

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Net Financial Income

 

116.5

459.6

(343.1)

(74.7)

Financial Income

 

275.4

527.5

(252.1)

(47.8)

Financial Expense

 

158.9

67.9

91.0

134.0

In 3Q22, the Company reported net financial income of $116.5 million, compared to the net financial income of $459.6 million reported in the same period of 2021.

TAXES FOR THE PERIOD

 

 

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Total Taxes

 

285.3

380.6

(95.3)

(25.0)

Income tax

 

169.8

(275.3)

445.1

(161.7)

Deferred income tax

 

115.5

655.9

(540.4)

(82.4)

As a result of a higher operating income, Total taxes for the 3Q22 were $285.3 million compared with total taxes of $380.6 million in the same period of 2021.

NET controlling interest INCOME

 

 

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Net income

 

962.4

817.4

145.0

17.7

Net margin

 

3.9%

4.0%

-

-

Non-Controlling Interest income

 

(9.7)

(26.4)

24.3

n/a

Net controlling interest income

 

972.1

843.8

128.3

n/a

Basic and diluted income per share1

 

1.62

1.41

0.2

n/a

Basic and diluted income per ADR2

 

19.46

16.88

2.6

n/a

Weighted average Shares outstanding3

 

599,380

599,734

-

-

1 In pesos

2 in pesos, one ADR equals to twelve shares

3 In thousands of shares

For the 3Q22 we had Net controlling interest income of $972.1 million, representing a basic and diluted income per share of $1.62 compared with a Net controlling interest income of $843.8 million, and $1.41 pesos of income per share in 3Q21. This increase was attributed to higher operating results.

EBITDA

 

 

In millions of pesos

 

3Q22

3Q21

Change

 

 

$

$

$

%

Net controlling interest income

 

972.1

843.8

128.3

15.2

Income tax expense (benefit)

 

285.3

380.6

(95.3)

(25.0)

Result in associates

 

(9.7)

(26.4)

16.7

(63.3)

Net finance (income) expense

 

(116.5)

(459.6)

343.1

(74.7)

Depreciation and amortization

 

394.6

389.0

5.6

1.5

EBITDA

 

1,525.8

1,127.4

398.5

35.3

EBITDA Margin (%)

 

6.2%

5.6%

-

-

Net revenues

 

24,457.8

20,229.0

4,228.8

20.9

EBITDA in 3Q22 reached $1,525.8 million, representing an EBITDA margin of 6.2%, compared to an EBITDA of $1,127.4 million in 3Q21, with an EBITDA margin of 5.6%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

 

 

 

 

In millions of pesos

 

9M22

9M21

Change

 

 

$

$

$

%

Net Sales

 

75,256.9

60,447.5

14,809.3

24.5

Net sales in Mexico

 

55,918.9

45,530.7

10,388.2

22.8

Net sales in the U.S.

 

19,337.9

14,916.8

4,421.1

29.6

NET SALES BY SEGMENT

 

 

 

 

In millions of pesos

 

9M22

9M21

Change

 

 

$

$

$

%

Net Sales

 

75,256.9

60,447.5

14,809.3

24.5

Poultry

 

64,372.9

52,920.0

11,452.9

21.6

Other

 

10,884.0

7,527.5

3,356.4

44.6

NET VOLUME SOLD BY SEGMENT

   

In metric tons

 

 

 

Change

 

 

9M22

9M21

Volume

%

Total sales volume:

 

1,753,821

1,712,125

41,695.8

2.4

Poultry

 

1,313,071

1,301,129

11,941.3

0.9

Others

 

440,750

410,995

29,754.5

7.2

During the nine months of 2022, net sales totaled $75,256.9 million; $14,809.3 million or 24.5% more than $60,447.5 million reported in the same period of 2021. The increase in sales is mainly attributable to higher volume sold in Others as part of the integration of RYC Alimentos, as well as higher prices in our main business lines when compared to the accumulated results of the nine months of 2021.

In 9M22, sales of our U.S. operations represented 25.7% of our total sales, compared with 24.7% in 9M21.

OPERATING RESULTS
 

9M22

9M21

Change

 

$

$

$

%

Cost of Sales

 

60,948.7

49,659.7

11,289.0

22.7

Gross Profit

 

14,308.2

10,787.9

3,520.3

32.6

Total SG&A

 

6,236.7

5,157.4

1,079.2

20.9

Other Income (expense)

 

32.9

(244.3)

277.2

(113.5)

Operating Income

 

8,104.4

5,386.1

2,718.2

50.5

Net Financial Income

 

38.6

682.2

(643.6)

(94.3)

Income Tax

 

2,117.9

1,733.3

384.7

22.2

Net Income

 

6,025.1

4,335.1

1,690.0

39.0

Non-controlling interest

 

(47.6)

(85.8)

38.1

(44.5)

Net controlling interest Income

 

6,072.7

4,420.9

1,651.8

37.4

In 9M22, the cost of sales totaled $60,948.7 million; $11,289.0 million or 22.7% higher than the $49,659.7 million reported in 9M21.

As a result, we reached a gross profit of $14,308.2 million and a gross margin of 19.0% in 9M22, when compared to $10,787.9 million of gross profit and margin of 17.8% reached in the same period of 2021.

Total SG&A in 9M22 were $6,236.7 million; $1,079.2 million or 20.9% more than the $5,157.4 million reported in 9M21. In 9M22 total SG&A as a percentage of net sales represented 8.3% compared with 8.5% in 9M21.

In 9M22 we had other income of $32.9 million, compared with other expenses of $244.3 million reported in 9M21.

Operating income in 9M22 was $8,104.4 million, which represents an operating margin of 10.8%, an increase compared to the operating income of $5,386.1 million and the operating margin of 8.9% in 9M21.

Net financial income in 9M22 was $38.6 million, compared to a net financial income of $682.2 million in 9M21.

Total taxes were $2,117.9 million as of September 30, 2022. These taxes include $1,169.1 million of income tax and $948.9 million of deferred income taxes. These figures compare to total taxes of $1,733.3 million in 9M21.

All the above resulted in a Net controlling interest income of $6,072.7 million in 9M22, which represents $10.13 pesos of earnings per share, while in the 9M21 the Net controlling interest income totaled $4,420.9 million and $7.37 pesos of earnings per share.

EBITDA

 

 

 

 

In millions of pesos

 

9M22

9M21

Change

 

 

$

$

$

%

Net controlling interest profit

 

6,072.7

4,420.9

1,651.8

37.4

Income tax expense (benefit)

 

2,117.9

1,733.3

384.7

22.2

Result in associates

 

(47.6)

(85.8)

38.1

(44.5)

Net finance (income) expense

 

(38.6)

(682.2)

643.6

(94.3)

Depreciation and amortization

 

1,150.9

1,092.1

58.9

5.4

EBITDA

 

9,255.3

6,478.2

2,777.1

42.9

EBITDA Margin (%)

 

12.3%

10.7%

-

-

Net revenues

 

75,256.9

60,447.5

14,809.3

24.5

EBITDA in 9M22 reached $9,255.3 million, representing an EBITDA margin of 12.3%, compared to an EBITDA of $6,478.2 million in 9M21, with a margin of 10.7%.

BALANCE SHEET

BALANCE SHEET DATA

 

 

 

 

In millions of pesos

 

Sept. 30, 2022

Dec. 31st, 2021

Change

 

 

$

$

$

%

TOTAL ASSETS

 

72,044.1

65,988.8

6,055.3

9.2

Cash and cash equivalents

 

20,391.7

20,777.0

(385.3)

(1.9)

Accounts receivable

 

5,815.2

5,108.5

706.8

13.8

TOTAL LIABILITIES

 

18,862.3

17,704.7

1,157.6

6.5

Accounts payable

 

6,008.8

10,200.7

(4,191.9)

(41.1)

Short-term debt

 

981.7

1,993.9

(1,012.2)

(50.8)

Long-term debt

 

2,996.5

-

2,996.5

N/A

TOTAL STOCKHOLDERS’ EQUITY

 

53,181.8

48,284.1

4,897.8

10.1

Capital stock

 

1,174.4

1,174.4

-

-

Cash and equivalents as of September 30, 2022 totaled $20,391.7 million vs $20,777.0 million as of December 31, 2021.

Total debt as of September 30, 2022 was $3,978.2 million, compared to $ 1,993.9 million reported as of December 31, 2021.

Net cash as of September 30, 2022 was $ 16,413.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021.

CAPITAL EXPENDITURES

In millions of pesos

 

9M22

9M21

Change

 

 

$

$

$

%

Capital Expenditures

 

2,954.9

2,251.1

703.8

31.3

Total CAPEX for the 9M22 was $2,954.9 million and $2,251.1 million in 9M21, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of September 30, 2022

Total Shares

600,000,000

Total free float

26.75%

Market cap (millions of pesos)

$43,458

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

September

80.00

76.81

77.86

 

48.13

45.78

46.03

August

79.98

75.34

79.97

 

48.05

43.97

47.33

July

76.56

69.97

76.56

 

45.18

40.56

45.18

June

76.90

68.56

72.43

 

47.25

39.70

43.35

May

78.17

76.03

76.27

 

47.09

44.75

46.86

April

77.83

74.96

77.83

 

46.64

44.42

45.78

March

69.42

67.16

68.04

 

40.45

38.30

39.95

February

71.99

68.02

69.42

 

43.19

39.67

39.67

January

73.60

69.22

69.28

 

44.66

41.14

41.14

 

ANALYST COVERAGE

Institution

Analyst name

E-mail

BANK OF AMERICA

Fernando Olvera

folvera@bofa.com

BBVA BANCOMER

Pablo Abraham Peregrina

pablo.abraham@bbva.com

GBM

Luis Rodrigo Willard Alonso

lrwillard@gbm.com

INTERCAM

Richard Horbach Martinez

rhorbach@intercam.com.mx

JP MORGAN

Ulises Argote

ulises.argote@jpmorgan.com

SANTANDER

Alan Alanis Peña

aalanis@santander.com.mx

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $20.13 per USD $1.0, which corresponds to the rate at the close of September 30, 2022, 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  

2022

 

2022

 

2021*

       
TOTAL ASSETS  

$

3,578.9

 

72,044.1

 

65,988.8

       
Total current assets  

 

2,036.1

 

40,987.2

 

37,845.6

Cash and cash equivalents  

 

1,013.0

 

20,391.7

 

20,777.0

Total accounts receivable  

 

288.9

 

5,815.2

 

5,108.5

Inventories  

 

636.1

 

12,805.3

 

9,145.6

Other current assets  

 

98.1

 

1,975.1

 

2,814.6

       
Total non current assets  

 

1,542.8

 

31,056.3

 

28,143.2

Net property, plant and equipment  

 

1,164.1

 

23,433.8

 

21,763.4

Other non current Assets  

 

378.7

 

7,622.5

 

6,379.8

TOTAL LIABILITIES  

$

937.0

 

18,862.3

 

17,704.7

       
Total current liabilities  

 

478.5

 

9,632.2

 

12,835.3

Notes payable to banks  

 

48.8

 

981.7

 

1,993.9

Accounts payable  

 

298.5

 

6,008.8

 

10,200.7

Other taxes payable and other accruals  

 

131.2

 

2,641.7

 

640.7

       
Total long-term liabilities  

 

458.5

 

9,230.0

 

4,869.4

Long-term debt  

 

148.9

 

2,996.5

 

-

Other non current liabilities  

 

50.4

 

1,013.7

 

1,027.9

Deferred income taxes  

 

259.3

 

5,219.9

 

3,841.5

       
TOTAL STOCKHOLDERS' EQUITY  

$

2,641.9

 

53,181.8

 

48,284.1

       
Capital stock  

 

58.3

 

1,174.4

 

1,174.4

Commission in shares issued  

 

20.6

 

414.1

 

414.1

Retained earnings  

 

2,492.8

 

50,179.4

 

45,038.6

Others accounts  

 

48.9

 

983.8

 

1,179.2

Non controlling interest  

 

21.4

 

430.1

 

477.7

       
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  

$

3,578.9

 

72,044.1

 

65,988.8

       
*Audited      
CONSOLIDATED STATEMENT OF INCOME  
Third Quarter Results, ended September 30th:    
-Unaudited-      
 

U.S. Dollar

 

 

 

 

In millions pesos  

2022

 

2022

 

2021

Net sales  

$

1,215.0

 

 

24,457.8

 

 

20,229.0

 

Cost of sales  

 

1,052.6

 

 

21,189.7

 

 

17,619.0

 

Gross profit  

 

162.3

 

 

3,268.1

 

 

2,610.0

 

SG&A  

 

105.0

 

 

2,114.2

 

 

1,790.9

 

Other income (expenses), net  

 

(1.1

)

 

(22.6

)

 

(80.7

)

Operating income  

 

56.2

 

 

1,131.2

 

 

738.4

 

Net finance income  

 

5.8

 

 

116.5

 

 

459.6

 

Income tax  

 

14.2

 

 

285.3

 

 

380.6

 

Net Income  

$

47.8

 

 

962.4

 

 

817.4

 

       
Non-controlling interest  

 

(0.48

)

 

(9.7

)

 

(26.4

)

Net controlling interest profit  

 

48.29

 

 

972.1

 

 

843.8

 

Basic and diluted earnings per share  

 

0.08

 

 

1.62

 

 

1.41

 

Basic and diluted earnings per ADR  

 

0.97

 

 

19.46

 

 

16.88

 

Weighted average Shares outstanding1  

 

599,380

 

 

599,380

 

 

599,734

 

       
EBITDA Result  

$

75.8

 

 

1,525.8

 

 

1,127.4

 

       
Gross margin  

 

13.4

%

 

13.4

%

 

12.9

%

Operating margin  

 

4.6

%

 

4.6

%

 

3.7

%

Net margin  

 

4.0

%

 

3.9

%

 

4.0

%

EBITDA margin  

 

6.2

%

 

6.2

%

 

5.6

%

       
1 In thousands      
CONSOLIDATED STATEMENT OF INCOME  
Accumulated results, for the nine months ended September 30.  
-Unaudited-      
 

U.S. Dollar

   
In millions pesos  

2022

 

2022

 

2021

Net sales  

$

3,738.5

 

 

75,256.9

 

 

60,447.5

 

Cost of sales  

 

3,027.8

 

 

60,948.7

 

 

49,659.7

 

Gross profit  

 

710.8

 

 

14,308.2

 

 

10,787.9

 

Selling, general and administrative expenses  

 

309.8

 

 

6,236.7

 

 

5,157.4

 

Other income (expenses), net  

 

1.6

 

 

32.9

 

 

(244.3

)

Operating income  

 

402.6

 

 

8,104.4

 

 

5,386.1

 

Net finance income  

 

1.92

 

 

38.6

 

 

682.24

 

Income tax  

 

105.2

 

 

2,117.9

 

 

1,733.3

 

Net income  

$

299.3

 

 

6,025.1

 

 

4,335.1

 

       
Non-controlling interest  

 

(2.37

)

 

(47.6

)

 

(85.8

)

Net controlling interest profit  

 

301.7

 

 

6,072.7

 

 

4,420.9

 

Basic and diluted earnings per share  

 

0.50

 

 

10.13

 

 

7.37

 

Basic and diluted earnings per ADR  

 

6.04

 

 

121.6

 

 

88.45

 

Weighted average Shares outstanding1  

 

599,380

 

 

599,380

 

 

599,766

 

       
EBITDA Result  

$

459.8

 

 

9,255.3

 

 

6,478.2

 

       
Gross margin  

 

19.0

%

 

19.0

%

 

17.8

%

Operating margin  

 

10.8

%

 

10.8

%

 

8.9

%

Net margin  

 

8.1

%

 

8.0

%

 

7.2

%

EBITDA margin  

 

12.3

%

 

12.3

%

 

10.7

%

       
1 In thousands      
CONSOLIDATED STATEMENT OF CASH FLOWS    
In million of pesos    
-Unaudited-    
     

U.S. Dollar

 

September 30,

2022

 

2022

 

2021

     
NET MAJORITY INCOME BEFORE INCOME TAX

$

404.5

 

 

8,143.0

 

 

6,068.4

 

     
ITEMS RELATING TO INVESTING ACTIVITIES:

 

66.7

 

 

1,342.8

 

 

1,226.7

 

Depreciation and others

 

74.4

 

 

1,498.6

 

 

1,358.3

 

Income (loss) on sale of plant and equipment

 

2.7

 

 

55.3

 

 

63.3

 

Other Items

 

(10.5

)

 

(211.2

)

 

(194.9

)

     
NET CASH GENERATED FROM NET INCOME BEFORE TAXES

 

471.2

 

 

9,485.8

 

 

7,295.1

 

CASH GENERATED OR USED IN THE OPERATION:

 

(250.0

)

 

(5,031.9

)

 

(1,166.0

)

Decrease (increase) in accounts receivable

 

(22.1

)

 

(443.9

)

 

(239.0

)

Decrease (increase) in inventories

 

(195.7

)

 

(3,938.8

)

 

(1,487.0

)

Increase (decrease) in accounts payable

 

(136.2

)

 

(2,740.9

)

 

1,791.9

 

Other Items

 

103.9

 

 

2,091.7

 

 

(1,231.9

)

     
NET CASH FLOW FROM OPERATING ACTIVITIES

 

221.3

 

 

4,453.9

 

 

6,129.1

 

     
NET CASH FLOW FROM INVESTING ACTIVITIES

 

(162.7

)

 

(3,275.3

)

 

(1,629.1

)

Acquisition of property, plant and equipment

 

(146.8

)

 

(2,954.9

)

 

(2,251.1

)

Proceeds from sales of property plant and equipment

 

3.1

 

 

61.8

 

 

17.1

 

Other Items

 

(19.0

)

 

(382.1

)

 

604.9

 

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

 

58.6

 

 

1,178.6

 

 

4,500.0

 

     
Net cash provided by financing activities:

 

(74.2

)

 

(1,494.0

)

 

(3,654.4

)

Proceeds from loans

 

195.2

 

 

3,930.0

 

 

1,237.2

 

Principal payments on loans

 

(96.7

)

 

(1,945.7

)

 

(1,903.8

)

Dividends paid

 

(48.8

)

 

(983.0

)

 

(851.6

)

Other items

 

(124.0

)

 

(2,495.3

)

 

(2,136.1

)

Net increase (decrease) in cash and equivalents

 

(15.7

)

 

(315.4

)

 

845.6

 

     
Cash and investments at the beginning of year

$

1,028.7

 

 

20,707.1

 

 

19,242.4

 

CASH AND INVESTMENTS AT END OF PERIOD

$

1,013.0

 

 

20,391.7

 

 

20,088.0

 

     
Third Quarter 2022
Thousands of Mexican Pesos, as of September 30, 2022
TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED
3Q-2022 2Q-2022 3Q-2022 2Q-2022
Forward Vanilla y KO Fwd Hedge

$ 150,699

$ 20.13

$ 20.14

$ -48,982

$ -80,565

69% in 2022 and 31% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee
Futures for corn, soybean meal, soybean oil and natural gas Hedge

$ 511,252

CORN CORN

$ 12,462

$ 24,903

98% in 2022 and 2% in 2023
In USD per Bushel In USD per Bushel
month price month price
Sep-22

$ 6.288

Dec-22

$ 6.775

Dec-22

$ 6.198

SOYBEAN MEAL SOYBEAN MEAL
In USD per ton In USD per ton
month price month price
Aug-22

$ 435.5

Sep-22

$ 416.1

Oct-22

$ 405.7

Dec-22

$ 403.0

Dec-22

$ 406.7

SOYBEAN OIL SOYBEAN OIL
In US cents per pound In US cents per pound
Month Price Month Price

Aug-22

$ 67.01

Dec-22

$ 61.56

Sep-22

$ 65.68

NATURAL GAS
In USD/MM BTU
Month Price
Nov-22

$ 6.766

Dec-22

$ 7.065

Jan-23

$ 7.247

Feb-23

$ 6.937

Options of Corn Hedge

$ 314,868

CORN CORN

$ 37,181

$ 27,649

83% in 2022 and 17% in 2023
In USD per Bushel In USD per Bushel
month price month price
Sep-22

$ 6.288

Dec-22

$ 6.775

Dec-22

$ 6.198

Mar-23

$ 6.840

Mar-23

$ 6.263

Options of soybean meal Hedge

$ 439,720

SOYBEAN MEAL SOYBEAN MEAL

$ 12,013

$ 34,539

57% in 2022 and 43% in 2023
In USD per ton In USD per ton
month price month price
Aug-22

$ 435.5

Sep-22

$ 416.1

Oct-22

$ 405.7

Dec-22

$ 403.0

Dec-22

$ 406.7

Jan-23

$ 401.3

Jan-23

$ 405.9

Mar-23

$ 397.2

Mar-23

$ 401.3

May-23

$ 395.0

May-23

$ 398.3

 
-The total financial instruments do not exceed 5% of total assets as of September 30, 2022.
-The notional value represents the net position as of September 30, 2022 at the exchange rate of Ps.20.13 per one dollar.
-A negative value means an unfavorable effect for the Company.
Third Quarter 2022
Thousands of Mexican Pesos, as of September 30, 2022

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 y KO Fwd

-$ 48,982

$19.63

$ 20.63

$ 21.14

Direct

-$124,810

$ 26,845

$ 57,145

-5%

5%

10%

-5%

5%

10%

Futures of Corn: (2)

$ 12,462

$ 6.436

$ 7.114

$ 7.453

The effect will materialize as the inventory is consumed

-$ 13,101

$ 38,024

$ 63,587

Futures of Soybean Meal: (2)

$ 382.9

$ 423.2

$ 443.3

Futures for Soy Oil (2)

$ 58.5

$ 64.6

$ 67.7

Futures for Natural Gas (2)

$ 6.4

$ 7.1

$ 7.4

Options for Corn

$ 37,181

$ 6.436

$ 7.114

$ 7.453

$ 21,438

$ 52,925

$ 68,668

Options of Soybean Meal

$ 12,013

$ 382.9

$ 423.2

$ 443.3

-$ 9,973

$ 33,999

$ 55,985

 
(1) The reference value is the exchange rate of Ps. $20.13 per USD as of September 30, 2022.
(2) The reference values are: future of corn Dec 2022, $6.7750 USD/bushel, the future of soybeanmeal Dec 2022, $403.00 USD/ton, the future of soybean oil Dec 2022, $61.56 usd cts / pound and the future of natural gas Nov 2022, $6.77usd/ MM BTU
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 2022
Thousands of Mexican Pesos, as of September 30, 2022

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 y KO Fwd

-$48,982

$10.07

$15.10

$25.16

$30.20

Direct

-$1,565,538

-$807,260

$484,940

$1,034,577

CONFERENCE CALL INFORMATION

The Company will host its second quarter 2022 earnings call on Tuesday October 25th, 2022. The earnings call will take place at 8:30 am Central Time (9:30 am ET).

To participate in the earnings call, please dial:

Toll free in the U.S.: 866 374 5140

Toll free in Mexico: 1 866 779 1760

Toll Local Mexico: 52 55 6722 5258

Toll in the Brazil: 800 761 0711

To access the event online:

https://onlinexperiences.com/Launch/QReg/ShowUUID=C2665A6D-28B4-4A5B-95C3-99B542C27989&LangLocaleID=1033

Confirmation Number: 36258927#

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 80 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 32,000 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.

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.