Industrias Bachoco Announces Second Quarter 2021 Results

CELAYA, Mexico & GUANAJUATO, Mexico–(BUSINESS WIRE)–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 (“2Q21”) and first half (“1H21”) 2021 ended on June 30, 2021. 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- 2021 vs. 2020

  • Net sales increased 27% in 2Q21 and increased 25% in 1H21
  • EBITDA margin was 11.7% for 2Q21 and 13.3% for the 1H21
  • SG&A as percentage of net sales was 8.3% and 8.4% for 2Q21 and 1H21 respectively.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “During this quarter, we continued to observe a good balance between supply and demand. Even though costs were higher, our focus on efficiencies drove us to achieve good results in our second quarter of 2021.

We reached an increase in total sales of 27% for 2Q21 when compared to the same period of 2020. This led us to a gross margin of 19.0% for 2Q21 compared to the 11.3% of 2Q20.

Regarding our cost of sales, raw material prices continued to be high in USD terms. This meant an increase in our total cost of sales of 16% when compared to the same quarter of 2020. However, our efforts and focus towards efficiencies in our processes permitted us to offset part of this increase.

In terms of expenses, we kept our SG&A under control as a percentage of sales, we reported 8.3% for the quarter and 8.4% for the first half of 2021, which is lower compared to the 9.5% and 9.8% for the respective periods of 2020.

As a result, our operating profit for the quarter was $2,088.8 million, which is significantly higher than 2Q20 where we saw most of the negative impacts of COVID-19.

We reported an EBITDA of $2,437.4 million in 2Q21, which is higher than the $437.6 million reported in 2Q20. The EBITDA margins for each of those two periods were 11.7% and 2.7%, respectively. For the first half of the year, our EBITDA margin was 13.3%, compared to 4.3% EBITDA margin of the same period of 2020.

CAPEX for the quarter was $1,307.5 million compared to $992.4 million for the same period of 2020. This was achieved while ending with a net cash position of $19,490.6 million by the end of 2Q21.

To our commitment of continually adding value to our shareholders, in 2Q21 we reported earnings per share of $2.46 and for the first half of 2021 we reported earnings per share of $5.96.

We will remain focused on efficiencies across all of our processes which will allow us to supply our markets and customers as best as we can and as we have done through the years.”

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

 

2Q21

2Q20

Change

 

 

$

$

$

%

Net Sales

 

20,860.9

16,431.9

4,429.0

27.0

Net sales in Mexico

 

15,937.6

11,339.9

4,597.6

40.5

Net sales in the U.S.

 

4,923.4

5,092.0

(168.6)

(3.3)

NET SALES BY SEGMENT

 

 

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

$

Net Sales

 

20,860.9

16,431.9

4,429.0

27.0

Poultry

 

18,170.5

14,796.3

3,374.1

22.8

Other

 

2,690.5

1,635.6

1,054.9

64.5

NET VOLUME SOLD BY SEGMENT

In tons

 

 

Change

 

2Q21

2Q20

Volume

%

Total sales volume:

583,661

554,677

28,984.5

5.2

Poultry

441,486

433,484

8,002.1

1.8

Others

142,175

121,192

20,982.4

17.3

The Company’s 2Q21 net sales totaled $20,860.9 million; $4,429.0 million or 27.0% more than the $16,431.9 million reported in 2Q20. The increase was mainly a result of higher prices and higher volume sold in our main business lines.

In 2Q21, sales of our U.S. operations represented 23.6% of our total sales compared to a 31.0% in the same period of 2020. The decrease was mainly a result of a lower exchange rate in 2Q21 vs the same period of 2020.

GROSS PROFIT

 

 

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Cost of sales

 

16,901.1

14,574.5

2,326.6

16.0

Gross profit

 

3,959.8

1,857.4

2,102.5

113.2

Gross margin

 

19.0%

11.3%

In 2Q21, cost of sales was $16,901.1 million; $2,326.6 million or 16.0% higher than the $14,574.5 million reported in 2Q20. 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 2Q21 was $3,959.8 million, higher than the gross profit of $1,857.4 million in 2Q20, with a gross margin of 19.0% for 2Q21 vs 11.3% in 2Q20. The result of this quarter compares to a difficult 2Q20, when mobility restrictions due to COVID-19 negatively affected some of the markets that we serve, which resulted in oversupply conditions throughout the industry.

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

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Total SG&A

 

1,729.2

1,567.0

162.2

10.4

Total SG&A expenses in 2Q21 were $1,729.2 million; $162.2 million higher than the $1,567.0 million reported in 2Q20. Total SG&A expenses as a percentage of net sales were 8.3% in 2Q21 and 9.5% in 2Q20.

OTHER INCOME (EXPENSE), NET

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Other income (expense), net

 

(141.8)

(207.5)

65.7

(31.7)

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 2Q21, we recorded other expenses of $141.8 million, compared with other expenses of $207.5 million reported in 2Q20.

OPERATING INCOME

 

 

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Operating income

 

2,088.8

82.8

2,005.9

2,421.5

Operating margin

 

10.0%

0.5%

Operating income in 2Q21 totaled $2,088.8 million; $2,005.9 million higher than the $82.8 million reported in 2Q20. This represents an operating margin of 10.0% for 2Q21, higher when compared to the same period of 2020. The increase in operating income is mainly attributed to efficiencies in our processes and better market conditions compared to 2Q20, which is allowing us to pass to our sales price the increases observed in raw materials costs.

NET FINANCIAL INCOME

 

 

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Net Financial Income

 

(97.0)

(122.3)

25.3

(20.7)

Financial Income

 

2.1

(42.3)

44.4

(105.0)

Financial Expense

 

99.1

80.0

19.1

23.8

In 2Q21, the Company reported net financial expenses of $97.0 million, compared to the net financial expenses of $122.3 million reported in the same period of 2020.

TAXES FOR THE PERIOD

 

 

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Total Taxes

 

548.7

(11.2)

559.9

(4,986.2)

Income tax

 

804.5

(407.6)

1,212.1

(297.4)

Deferred income tax

 

(255.9)

396.4

(652.3)

(164.5)

As a result of a higher operating income, Total taxes for the 2Q21 were $548.7 million compared with total taxes of $(11.2) million in the same period of 2020.

NET INCOME

 

 

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Net income

 

1,443.2

(28.2)

1,471.4

(5,214.7)

Net margin

 

6.9%

(0.2)%

Basic and diluted earnings per share1

 

2.46

(0.06)

2.5

n/a

Basic and diluted earnings per ADR2

 

29.55

(0.70)

30.2

n/a

Weighted average Shares outstanding3

 

599,743

599,787

1 In pesos

2 in pesos, one ADR equals to twelve shares

3 In thousands of shares

For the 2Q21 we had Net income of $1,443.2 million, representing a basic and diluted income per share of $2.46 compared with a negative net income of $28.2 million, which compares with $(0.06) pesos of net income per share in 2Q20. This increase was attributed to higher operating results. Net margin in 2Q21 was a positive 6.9% compared to a negative 0.2% reported in 2Q20.

EBITDA

 

 

In millions of pesos

 

2Q21

2Q20

Change

 

 

$

$

$

%

Net income

 

1,476.8

(34.8)

1,511.6

(4,343.0)

Income tax expense (benefit)

 

548.7

(11.2)

559.9

(4,986.2)

Result in associates

 

(33.6)

6.6

(40.2)

(610.2)

Net finance (income) expense

 

97.0

122.3

(25.3)

(20.7)

Depreciation and amortization

 

348.6

354.8

(6.2)

(1.7)

EBITDA

 

2,437.4

437.6

1,999.8

457.0

EBITDA Margin (%)

 

11.7%

2.7%

Net revenues

 

20,860.9

16,431.9

4,429.0

27.0

EBITDA in 2Q21 reached $2,437.4 million, representing an EBITDA margin of 11.7%, compared to an EBITDA of $437.6 million in 2Q20, with an EBITDA margin of 2.7%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

 

 

 

 

In millions of pesos

 

1H21

1H20

Change

 

 

$

$

$

%

Net Sales

 

40,218.6

32,170.3

8,048.2

25.0

Net sales in Mexico

 

30,566.9

22,407.5

8,159.4

36.4

Net sales in the U.S.

 

9,651.6

9,762.8

(111.2)

(1.1)

NET SALES BY SEGMENT

 

 

 

 

In millions of pesos

 

1H21

1H20

Change

 

 

$

$

$

%

Net Sales

 

40,218.6

32,170.3

8,048.2

25.0

Poultry

 

35,154.3

28,959.1

6,195.2

21.4

Other

 

5,064.2

3,211.2

1,853.0

57.7

NET VOLUME SOLD BY SEGMENT

In metric tons

 

 

Change

 

1H21

1H20

Volume

%

Total sales volume:

1,141,743

1,142,694

(951.2)

(0.1)

Poultry

858,464

890,651

(32,187.3)

(3.6)

Others

283,279

252,043

31,236.0

12.4

During the first half of 2021, net sales totaled $40,218.6 million; $8,048.2 million or 25.0% more than $32,170.3 million reported in the same period of 2020. The increase in sales is mainly attributable to higher prices of our main business lines when compared to the first half of 2020.

In 1H21, sales of our U.S. operations represented 24.0% of our total sales, compared with 30.3% in 1H20. The decrease was mainly a result of the appreciation of the Mexican peso in the first half of 2021.

OPERATING RESULTS

 

 

 

 

In millions of pesos

 

1H21

1H20

Change

 

 

$

$

$

%

Cost of Sales

 

32,040.7

28,131.8

3,908.9

13.9

Gross Profit

 

8,177.9

4,038.5

4,139.4

102.5

Total SG&A

 

3,366.5

3,139.7

226.8

7.2

Other Income (expense)

 

(163.6)

(212.0)

48.4

(22.8)

Operating Income

 

4,647.7

686.8

3,960.9

576.7

Net Financial Income

 

222.6

2,304.2

(2,081.6)

(90.3)

Income Tax

 

1,352.6

849.1

503.5

59.3

Net Income

 

3,517.8

2,141.9

1,375.8

64.2

In 1H21, the cost of sales totaled $32,040.7 million; $3,908.9 million or 13.9% higher than the $28,131.8 million reported in 1H20.

As a result, we reached a gross profit of $8,177.9 million and a gross margin of 20.3% in 1H21, when compared to $4,038.5 million of gross profit and margin of 12.6% reached in the same period of 2020.

Total SG&A expenses in 1H21 were $3,366.5 million; $226.8 million or 7.2% more than the $3,139.7 million reported in 1H20. In 1H21 total SG&A expenses as a percentage of net sales represented 8.4% compared with 9.8% in 1H20.

In 1H21 we had other expenses of $163.6 million, compared with other expenses of $212 million reported in 1H20.

Operating income in 1H21 was $4,647.7 million, which represents an operating margin of 11.6%, an increase compared to the operating income of $686.8 million and the operating margin of 2.1% in 1H20.

Net financial income in 1H21 was $222.6 million, lower when compared to a net financial income of $2,304.2 million in 1H20, mainly as a result of the Mexican peso appreciation year over year.

Total taxes were $1,352.6 million as of June 30, 2021. These taxes include $1,329.3 million of income tax and $23.3 million of deferred income taxes. This figure compares to total taxes of $849.1 million in 1H20.

All the above resulted in a net income of $3,517.8 million or 8.7% of net margin in the 1H21, which represents $5.96 pesos of earnings per share; while in the 1H20 the net income totaled $2,141.9 million, 6.7% of net margin and $3.55 pesos of net income per share.

EBITDA

 

 

 

 

In millions of pesos

 

1H21

1H20

Change

 

 

$

$

$

%

Net controlling interest profit

 

3,577.2

2,131.8

1,445.3

67.8

Income tax expense (benefit)

 

1,352.6

849.1

503.5

59.3

Result in associates

 

(59.4)

10.1

(69.5)

(686.9)

Net finance (income) expense

 

(222.6)

(2,304.2)

2,081.6

(90.3)

Depreciation and amortization

 

703.1

698.1

5.0

0.7

EBITDA

 

5,350.8

1,384.9

3,965.9

286.4

EBITDA Margin (%)

 

13.3%

4.3%

Net revenues

 

40,218.6

32,170.3

8,048.2

25.0

EBITDA in 1H21 reached $5,350.8 million, representing an EBITDA margin of 13.3%, compared to an EBITDA of $1,384.9 million in 1H20, with a margin of 4.3%.

BALANCE SHEET

BALANCE SHEET DATA

 

 

 

 

In millions of pesos

 

June 30, 2021

Dec. 31, 2020

Change

 

 

$

$

$

%

TOTAL ASSETS

 

61,676.1

58,475.0

3,201.1

5.5

Cash and cash equivalents

 

21,461.0

19,242.4

2,218.5

11.5

Accounts receivable

 

4,249.9

4,366.7

(116.8)

(2.7)

TOTAL LIABILITIES

 

14,578.9

14,548.2

30.7

0.2

Accounts payable

 

5,593.5

5,834.0

(240.5)

(4.1)

Short-term debt

 

497.5

1,251.7

(754.2)

(60.3)

Long-term debt

 

1,472.8

1,460.4

12.4

0.8

TOTAL STOCKHOLDERS’ EQUITY

 

47,097.2

43,926.8

3,170.4

7.2

Capital stock

 

1,174.2

1,174.3

(0.1)

(0.0)

Cash and equivalents as of June 30, 2021 totaled $21,461.0 million vs $19,242.4 million as of December 31, 2020.

Total debt as of June 30, 2021 was $1,970.3 million, compared to $2,712.1 million reported as of December 31, 2020, mainly as a result of payments made in our short-term bank debt.

Net cash as of June 30, 2021 was $19,460.6 million, compared to net cash of $16,530.3 million as of December 31, 2020.

CAPITAL EXPENDITURES

In millions of pesos

 

1H21

1H20

Change

 

 

$

$

$

%

Capital Expenditures

 

1,307.5

992.4

315.1

31.7

Total CAPEX for the 1H21 was $1,307.5 million and $992.4 million in 1H20, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of June 30, 2021

Total Shares

600,000,000

Total free float

26.75%

Market cap (millions of pesos)

$45,162

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

77.89

73.93

75.27

47.60

43.93

46.32

May

77.50

74.92

76.52

46.76

44.55

46.40

April

75.39

68.04

74.73

45.47

39.73

44.47

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

Source: Yahoo Finances

ANALYST COVERAGE

Institution

Analyst name

E-mail

ACTINVER

Enrique Mendoza Farias

[email protected]

BBVA BANCOMER

Pablo Abraham Peregrina

[email protected]

GBM

Luis Rodrigo Willard Alonso

[email protected]

INTERCAM

Richard Horbach Martinez

[email protected]

JP MORGAN

Ulises Argote

[email protected]

SANTANDER

Hector Maya López

[email protected]

BANK OF AMERICA

Fernando Olvera

[email protected]

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $19.95 per USD $1.0, which corresponds to the rate at the close of June 30, 2021, 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 INCOME
Second Quarter Results, ended June 30th:
-Unaudited-

U.S. Dollar

 

 

 

 

In millions pesos

2021

 

2021

 

2020

Net sales

$

1,045.7

 

20,860.9

 

16,431.9

 

Cost of sales

 

847.2

 

16,901.1

 

14,574.5

 

Gross profit

 

198.5

 

3,959.8

 

1,857.4

 

SG&A

 

86.7

 

1,729.2

 

1,567.0

 

Other income (expenses), net

 

(7.1

)

(141.8

)

(207.5

)

Operating income

 

104.7

 

2,088.8

 

82.8

 

Net finance income

 

(4.9

)

(97.0

)

(122.3

)

Income tax

 

27.5

 

548.7

 

(11.2

)

Net Income

$

72.3

 

1,443.2

 

(28.2

)

 
Non-controlling interest

 

(1.69

)

(33.6

)

6.6

 

Net controlling interest profit

 

74.02

 

1,476.8

 

(34.8

)

Basic and diluted earnings per share

 

0.12

 

2.46

 

(0.06

)

Basic and diluted earnings per ADR

 

1.48

 

29.55

 

(0.70

)

Weighted average Shares outstanding1

 

599,743

 

599,743

 

599,787

 

 
EBITDA Result

$

122.2

 

2,437.4

 

437.6

 

 
Gross margin

 

19.0

%

19.0

%

11.3

%

Operating margin

 

10.0

%

10.0

%

0.5

%

Net margin

 

7.1

%

6.9

%

-0.2

%

EBITDA margin

 

11.7

%

11.7

%

2.7

%

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

U.S. Dollar

 

 

 

 

In millions pesos

2021

 

2021

 

2020

Net sales

$

2,016.0

 

40,218.6

 

32,170.3

 

Cost of sales

 

1,606.0

 

32,040.7

 

28,131.8

 

Gross profit

 

409.9

 

8,177.9

 

4,038.5

 

Selling, general and administrative expenses

 

168.7

 

3,366.5

 

3,139.7

 

Other income (expenses), net

 

(8.2

)

(163.6

)

(212.0

)

Operating income

 

233.0

 

4,647.7

 

686.8

 

Net finance income

 

11.2

 

222.6

 

2,304.2

 

Income tax

 

67.8

 

1,352.6

 

849.1

 

Net income

$

176.3

 

3,517.8

 

2,141.9

 

 
Non-controlling interest

 

(2.98

)

(59.4

)

10.1

 

Net controlling interest profit

 

179.3

 

3,577.2

 

2,131.8

 

Basic and diluted earnings per share

 

0.30

 

5.96

 

3.55

 

Basic and diluted earnings per ADR

 

3.59

 

71.6

 

42.65

 

Weighted average Shares outstanding1

 

599,790

 

599,790

 

599,815

 

 
EBITDA Result

$

268.2

 

5,350.8

 

1,384.9

 

 
Gross margin

 

20.3

%

20.3

%

12.6

%

Operating margin

 

11.6

%

11.6

%

2.1

%

Net margin

 

8.9

%

8.7

%

6.7

%

EBITDA margin

 

13.3

%

13.3

%

4.3

%

 
1 In thousands
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
-Unaudited-

In U.S. Dollar

 

June 30,

 

December 31,

In million pesos

2021

 

2021

 

2020*

 
TOTAL ASSETS

$

3,091.5

61,676.1

58,475.0

 
Total current assets

 

1,768.6

35,284.5

32,586.0

Cash and cash equivalents

 

1,075.7

21,461.0

19,242.4

Total accounts receivable

 

213.0

4,249.9

4,366.7

Inventories

 

399.9

7,977.9

7,701.0

Other current assets

 

80.0

1,595.8

1,275.9

 
Total non current assets

 

1,322.9

26,391.6

25,889.0

Net property, plant and equipment

 

1,018.3

20,314.8

19,733.8

Other non current Assets

 

304.6

6,076.8

6,155.2

 
TOTAL LIABILITIES

$

730.8

14,578.9

14,548.2

 
Total current liabilities

 

427.7

8,532.2

8,179.8

Notes payable to banks

 

24.9

497.5

1,251.7

Accounts payable

 

280.4

5,593.5

5,834.0

Other taxes payable and other accruals

 

122.4

2,441.2

1,094.1

 
Total long-term liabilities

 

303.1

6,046.7

6,368.4

Long-term debt

 

73.8

1,472.8

1,460.4

Other non current liabilities

 

48.2

962.0

1,033.0

Deferred income taxes

 

181.0

3,611.9

3,875.0

 
TOTAL STOCKHOLDERS’ EQUITY

$

2,360.8

47,097.2

43,926.8

 
Capital stock

 

58.9

1,174.2

1,174.3

Commission in shares issued

 

20.7

413.3

413.4

Retained earnings

 

2,206.4

44,018.1

40,874.4

Others accounts

 

47.6

948.8

855.5

Non controlling interest

 

27.2

542.8

609.2

 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

3,091.5

61,676.1

58,475.0

 
*Audited
CONSOLIDATED STATEMENT OF CASH FLOWS
In million of pesos
-Unaudited-
 

U.S. Dollar

 

June 30,

2021

 

2021

 

2020

 
NET MAJORITY INCOME BEFORE INCOME TAX

$

244.1

 

4,870.4

 

2,666.5

 

 
ITEMS RELATING TO INVESTING ACTIVITIES:

 

41.2

 

821.6

 

269.4

 

Depreciation and others

 

45.7

 

911.5

 

639.3

 

Income (loss) on sale of plant and equipment

 

2.2

 

43.3

 

(23.1

)

Other Items

 

(6.7

)

(133.2

)

(346.7

)

 
NET CASH GENERATED FROM NET INCOME BEFORE TAXES

 

285.3

 

5,691.9

 

2,935.9

 

CASH GENERATED OR USED IN THE OPERATION:

 

14.3

 

284.7

 

(1,977.9

)

Decrease (increase) in accounts receivable

 

(3.5

)

(70.5

)

(1,426.1

)

Decrease (increase) in inventories

 

(15.5

)

(310.0

)

395.7

 

Increase (decrease) in accounts payable

 

93.0

 

1,855.0

 

(1,961.8

)

Other Items

 

(59.6

)

(1,189.9

)

1,014.3

 

 
NET CASH FLOW FROM OPERATING ACTIVITIES

 

299.6

 

5,976.7

 

958.0

 

 
NET CASH FLOW FROM INVESTING ACTIVITIES

 

(44.2

)

(882.8

)

(188.6

)

Acquisition of property, plant and equipment

 

(65.5

)

(1,306.2

)

(824.6

)

Proceeds from sales of property plant and equipment

 

0.1

 

1.8

 

37.3

 

Other Items

 

21.1

 

421.6

 

598.7

 

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

 

255.3

 

5,093.9

 

769.4

 

 
Net cash provided by financing activities:

 

(144.1

)

(2,875.3

)

(706.5

)

Proceeds from loans

 

62.0

 

1,237.2

 

3,478.6

 

Principal payments on loans

 

(95.9

)

(1,912.3

)

(3,424.2

)

Dividends paid

 

(21.3

)

(425.8

)

(420.0

)

Other items

 

(88.9

)

(1,774.4

)

(340.9

)

Net increase (decrease) in cash and equivalents

 

111.2

 

2,218.5

 

62.9

 

 
Cash and investments at the beginning of year

$

964.5

 

19,242.4

 

19,164.8

 

CASH AND INVESTMENTS AT END OF PERIOD

$

1,075.7

 

21,461.0

 

19,227.7

 

 

DERIVATIVES POSITION REPORT

Second Quarter 2021
Thousands of Mexican Pesos, as of June 30, 2021
 
TYPE OF FINANCIAL
INSTRUMENT
OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE
BY YEAR
GUARANTIES
REQUIRED
2Q-2021 1Q-2021 2Q-2021 1Q-2021
Forward Vanilla,
and KO Fwd
Hedge

$

248,431

$

19.95

$

20.42

$

-237,421

$

-231,713

96% in 2021;
4% 2022
The deals
consider the
possibility of
margin calls but
not another kind
of guarantee
Futures for corn and
soybean meal
Hedge

$

201,788

CORN CORN

$

12,244

$

12,899

86% in 2021
and 14% in 2022
In USD per Bushel In USD per Bushel
month price month price
 
May-21

$

5.643

Jul-21

$

7.200

Jul-21

$

5.475

Sep-21

$

5.993

Sep-21

$

4.960

Dec-21

$

5.885

Dec-21

$

4.775

SOYBEAN MEAL SOYBEAN MEAL
In USD per ton In USD per ton
month price month price
Aug-21

$

377.5

Sep-21

$

379.0

May-21

$

423.2

Oct-21

$

378.8

Jul-21

$

424.8

Dec-21

$

381.7

Aug-21

$

419.6

Jan-22

$

380.1

Sep-21

$

410.7

Mar-22

$

374.1

Oct-21

$

399.6

May-22

$

371.8

Dec-21

$

397.5

Jul-22

$

373.7

Aug-22

$

369.6

Sep-22

$

369.6

Options of Corn Hedge

$

594,632

CORN CORN

$

88,823

$

33,523

99% in 2021
and 1% in 2022
In USD per Bushel In USD per Bushel
month price month price
Jul-21

$

7.200

May-21

$

5.643

Sep-21

$

5.993

Jul-21

$

5.475

Dec-21

$

5.885

Sep-21

$

4.960

Mar-22

$

5.955

Dec-21

$

4.775

Mar-22

$

4.194

Options of
soybean meal
Hedge

$

484,302

SOYBEAN MEAL SOYBEAN MEAL

$

3,603

$

36,364

80% in 2021
and 20% in 2022
In USD per ton In USD per ton
month price month price
Aug-21

$

377.5

May-21

$

423.2

Sep-21

$

379.0

Jul-21

$

424.8

Oct-21

$

378.8

Aug-21

$

419.6

Dec-21

$

381.7

Sep-21

$

410.7

Jan-22

$

380.1

Oct-21

$

399.6

Mar-22

$

374.1

Dec-21

$

397.5

May-22

$

371.8

Jan-22

$

394.2

Mar-22

$

383.9

 
-The total financial instruments do not exceed 5% of total assets as of June 30, 2021.
-The notional value represents the net position as of June 30, 2021 at the exchange rate of Ps.19.95 per one dollar.
-A negative value means an unfavorable effect for the Company.
Second Quarter 2021
Thousands of Mexican Pesos, as of June 30, 2021

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

-$

237,421

$

19.45

$

20.45

$

20.94

Direct

-$

361,308

-$

113,534

-$

478

-5%

5%

10%

-5%

5%

10%

Futures of Corn: (2)

$

12,244

$

6.840

$

7.560

$

7.920

The effect will
materialize as the
inventory is consumed

$

1,851

$

22,637

$

33,030

Futures of Soybean Meal: (2)

$

358.6

$

396.4

$

415.3

Options for Corn

$

88,823

$

6.840

$

7.560

$

7.920

$

68,536

$

109,110

$

129,397

Options of Soybean Meal

$

3,603

$

358.6

$

396.4

$

415.3

-$

20,613

$

27,818

$

52,033

(1)

The reference value is the exchange rate of Ps. $19.95 per USD as of June 30, 2021.

(2)

The reference values are; the future of corn for July 2021, $7.2000 USD/bushel and the future of soybean meal for August 2021, $377.50USD/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 2021
Thousands of Mexican Pesos, as of June 30, 2021

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

-$

237,421

$

9.97

$

14.96

$

24.93

$

29.92

Direct

-$

2,715,148

-$

1,476,285

$

787,856

$

1,789,187

CONFERENCE CALL INFORMATION

The Company will host its second quarter 2021 earnings call on Tuesday, July 27th, 2021. The earnings call will take place at 9:00 am Central Time (10:00 am ET).

To participate in the earnings call, please dial:

Toll free in the U.S.: 1 (888) 771-4371

Toll free in Mexico: 001 866 779 0965

Toll Local Mexico: 52 55 6722 5257

Toll in the Brazil: 0800 761 0710

A current list of available local and international free phone telephone numbers: http://web.meetme.net/r.aspx?p=12&a=UruYmiHQFTxayV

Confirmation Number: 50196779

COMPANY DESCRIPTION

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

Contacts

Maria Guadalupe Jaquez
[email protected]
Andrea Guerrero
[email protected]
T. +52(461)618 3555

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