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Industrias Bachoco Announces Fourth Quarter and Full Year 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 fourth quarter (“4Q22”) and full year (“2022”) ending on December 31st, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”).

HIGHLIGHTS 2022

  • Net sales increased 11.2% in 4Q22 and increased 21.0% in year 2022 vs equivalent periods of 2021 respectively.
  • EBITDA margin was 2.9% for 4Q22 and 10.0% for the whole year.
  • Earnings per basic and diluted share totaled $0.13 for the quarter and $10.26 for the year.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “It is known that the last quarter of the year is usually a challenging period, and 4Q22 was not the exception.

We kept observing high raw material prices compared to 2021 which had a negative impact in our cost of sales. Even when we had been able to partially offset some of that increase thru pricing, seasonal conditions on our markets, lowered our margins to profitability levels below 4Q21 range.

On the other hand, for 4Q22 our SG&A increased 12.1% vs 4Q21 showing the impacts of higher fuel, energy and labor costs.

As a result, in 4Q22 we reported an operating income of $306.6 million, 38.7% lower than the $500.2 million achieved in the same period of 2021. With operating margins of 1.3% and 2.4% respectively. In terms of EBITDA margin this put us in a 2.9% for 4Q22 vs the 4.0% of 4Q21.

For the full year of 2022, the balance was good. With a very strong first half of the year, we managed to achieve and EBITDA of $9,916.2 million (10.0% margin) which is 35.3% higher compared to the $7,328.2 million (9.0% margin) obtained in 2021.

As mentioned before, increases on raw material prices raised our working capital and put pressure on our Free Cash Flow. However, our financial discipline allowed us to end 2022 still with a solid structure reporting a net cash position of $15,857.4 million vs the $16,530.3 million reported in 2021.

Our CAPEX for 2022 were $4,666.2 million, a 34.1% increase vs 2021. Investments were oriented to our organic growth, and the integration of RYC Alimentos.

We continue to be very focused on capturing efficiencies across all our processes and being close to better serve our customers as we know this is key for our growth."

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 2021.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY

 

 

 

 

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Net Sales

 

23,633.8

21,251.5

2,382.3

11.2

Net sales in Mexico

 

17,734.3

15,807.8

1,926.5

12.2

Net sales in the U.S.

 

5,899.5

5,443.8

455.7

8.4

NET SALES BY SEGMENT

 

 

 

 

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Net Sales

 

23,633.8

21,251.5

2,382.3

11.2

Poultry

 

20,000.6

18,727.7

1,272.9

6.8

Other

 

3,633.2

2,523.8

1,109.4

44.0

NET VOLUME SOLD BY SEGMENT

 

 

 

 

In tons

 

 

 

Change

 

 

4Q22

4Q21

Volume

%

Total sales volume:

 

591,687

605,925

(14,238.0)

(2.3)

Poultry

 

452,003

467,942

(15,939.1)

(3.4)

Others

 

139,684

137,983

1,701.1

1.2

The Company’s 4Q22 net sales totaled $23,633.8 million; $2,382.3 million or 11.2% more than $21,251.5 million reported in 4Q21. The increase is a result of higher volume sold in Other and higher prices in our main business lines as part of our strategy for offsetting the increases on cost of sales.

In 4Q22, sales of our U.S. operations represented 25.0% of our total sales compared to 25.6% in 4Q21.

GROSS PROFIT

 

 

 

 

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Cost of sales

 

21,089.3

18,670.6

2,418.7

13.0

Gross profit

 

2,544.5

2,580.9

(36.4)

(1.4)

Gross margin

 

10.8%

12.1%

-

-

In 4Q22 , cost of sales was $21,089.3 million; $2,418.7 million or 13.0% higher than $18,670.6 million reported in 4Q21. This increase was mainly due to higher unit cost in our main business lines as we continued observing year over year increases in prices of our main raw materials.

The Company´s gross profit in 4Q22 was $2,544.5 million, 1.4% lower than the gross profit of $2,580.9 million in 4Q21, with a gross margin of 10.8% for 4Q22 vs 12.1% in 4Q21.

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

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Total SG&A

 

2,243.8

2,002.2

241.6

12.1

Total SG&A expenses in 4Q22 were $2,243.8 million; $241.6 million higher than the $2,002.2 million reported in 4Q21. Total SG&A expenses as a percentage of net sales represented 9.5% in 4Q22 and 9.4% in 4Q21.

OTHER INCOME (EXPENSE), NET

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Other income (expense), net

 

5.9

(78.5)

84.4

(107.5)

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.

OPERATING INCOME

 

 

 

 

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Operating income

 

306.6

500.2

(193.6)

(38.7)

Operating margin

 

1.3%

2.4%

-

-

Operating income in 4Q22 totaled $306.6 million; $193.6 million lower than the Operating income of $500.2 million reported in 4Q21. This represents an operating margin of 1.3% for 4Q22, versus 2.4% operating margin in the same period of 2021. The decrease in operating income is mainly attributed to higher raw material costs and higher SG&A.

NET FINANCIAL INCOME

 

 

 

 

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Net Financial Income

 

(359.3)

167.6

(526.9)

(314.3)

Financial Income

 

495.7

204.2

291.4

142.7

Financial Expense

 

855.0

36.6

818.4

2,235.4

In 4Q22, the Company reported net financial expenses of $359.3 million, compared to a net financial income of $167.6 million reported in the same period of 2021. From the $855.0 million of Financial Expenses, $465.5 million are a result of exchange rate valuation.

TAXES FOR THE PERIOD

 

 

 

 

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Total Taxes

 

(110.7)

72.7

(183.4)

(252.2)

Income tax

 

498.3

736.6

(238.3)

(32.4)

Deferred income tax

 

(609.0)

(663.9)

54.9

(8.3)

Total taxes for the 4Q22 were a credit of $110.7 million, compared with total taxes of $72.7 million charged for the same period of 2021. This was a result of lower income before taxes for the 4Q22.

NET CONTROLLING INTEREST INCOME

In millions of pesos

4Q22

4Q21

Change

$

$

$

%

Net income

58.0

595.1

(537.1)

(90.3)

Net margin

0.2%

2.8%

-

-

Non-Controlling Interest income

(21.5)

(45.7)

24.2

n/a

Net controlling interest income

79.5

640.8

(561.3)

n/a

Basic and diluted income per share1

0.13

1.07

(0.9)

n/a

Basic and diluted income per ADR2

1.59

12.82

(11.2)

n/a

Weighted average Shares outstanding3

599,380

599,624

-

-

1 In pesos

2 in pesos, one ADR equals to twelve shares

3 In thousands of shares

The net controlling interest income for 4Q22 was $79.5 million, representing $0.13 pesos of earnings per share, compared with a net controlling interest income of $640.8 million, which represented a $1.07 pesos of earnings per share in 4Q21. This decrease is mainly attributed to lower operating results and higher financial expenses.

EBITDA

In millions of pesos

 

4Q22

4Q21

Change

 

 

$

$

$

%

Net controlling interest income

 

79.5

640.8

(561.3)

(87.6)

Income tax expense (benefit)

 

(110.7)

72.7

(183.4)

(252.2)

Result in associates

 

(21.5)

(45.7)

24.2

(53.0)

Net finance (income) expense

 

359.3

(167.6)

526.9

(314.3)

Depreciation and amortization

 

388.0

349.7

38.2

10.9

EBITDA

 

694.6

850.0

(155.4)

(18.3)

EBITDA Margin (%)

 

2.9%

4.0%

-

-

Net revenues

 

23,633.8

21,251.5

2,382.3

11.2

EBITDA in 4Q22 reached $694.6 million representing an EBITDA margin of 2.9%, compared to an EBITDA of $850.0 million in 4Q21, with an EBITDA margin of 4.0%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

 

 

 

 

In millions of pesos

 

2022

2021

Change

 

 

$

$

$

%

Net Sales

 

98,890.7

81,699.1

17,191.6

21.0

Net sales in Mexico

 

73,653.2

61,338.5

12,314.8

20.1

Net sales in the U.S.

 

25,237.4

20,360.6

4,876.8

24.0

NET SALES BY SEGMENT

 

 

 

 

In millions of pesos

 

2022

2021

Change

 

 

$

$

$

%

Net Sales

 

98,890.7

81,699.1

17,191.6

21.0

Poultry

 

84,373.5

71,647.7

12,725.7

17.8

Other

 

14,517.2

10,051.3

4,465.9

44.4

NET VOLUME SOLD BY SEGMENT

 

 

 

 

In metric tons

 

 

 

Change

 

 

2022

2021

Volume

%

Total sales volume:

 

2,358,390

2,318,049

40,340.1

1.7

Poultry

 

1,764,623

1,769,071

(4,448.7)

(0.3)

Others

 

593,767

548,978

44,788.8

8.2

In 2022, net sales totaled $98,890.7 million; $17,191.6 million or 21.0% more than the $81,699.1 million reported in the same period of 2021.

In 2022, sales of our U.S. operations represented 25.5% of our total sales, compared with 24.9% in 2021.

OPERATING RESULTS

 

 

 

 

In millions of pesos

 

2022

2021

Change

 

 

$

$

$

%

Cost of Sales

 

82,038.0

68,356.7

13,681.3

20.0

Gross Profit

 

16,852.7

13,342.4

3,510.3

26.3

Total SG&A

 

8,480.4

7,133.3

1,347.2

18.9

Other Income (expense)

 

38.8

(322.8)

361.5

(112.0)

Operating Income

 

8,411.0

5,886.4

2,524.6

42.9

Net Financial Income

 

(320.7)

849.9

(1,170.5)

(137.7)

Income Tax

 

2,007.2

1,806.0

201.2

11.1

Net Income

 

6,083.1

4,930.3

1,152.8

23.4

Non-controlling interest

 

(69.1)

(131.5)

62.3

(47.4)

Net controlling interest Income

 

6,152.2

5,061.7

1,090.5

21.5

In the 2022, the cost of sales totaled $82,038.0 million; $13,681.3 million or 20.0% higher than $68,356.7 million reported in the 2021.

As a result, we reached a gross profit of $16,852.7 million and a gross margin of 17.0% in 2022, when compared to $13,342.4 million of gross profit and a gross margin of 16.3% reached in the same period of 2021.

Total SG&A in 2022 were $8,480.4 million; $1,347.2 million or 18.9% higher than the $7,133.3 million reported in 2021. Total SG&A expenses as a percentage of net sales represented 8.6% in 2022 and 8.7% in 2021.

In 2022 we had other income of $38.8 million, compared with other expenses of $322.8 million reported in 2021.

Operating income in 2022 was $8,411.0 million, which represents an operating margin of 8.5%, an increase from an operating income of $5,886.4 million with an operating margin of 7.2% in 2021.

We had Net financial expenses in 2022 of $320.7 million which compares to a Net financial income of $849.9 million in 2021.

Total taxes were $2,007.2 million as of December 31st, 2022. These include $1,667.4 million of income tax and $339.9 million of deferred income taxes. Those figures compare to an income tax of $1,790.6 million and deferred income taxes of $15.4 million in 2021.

After Non-controlling interest, all the above resulted in a Net controlling interest income of $6,152.2 million or 6.2% margin in 2022, which represents $10.26 pesos of earnings per share; while in the 2021 the Net controlling interest income totaled $5,061.7 million, 5.1% margin and $8.44 pesos of income per share.

EBITDA

 

 

 

 

In millions of pesos

 

2022

2021

Change

 

 

$

$

$

%

Net controlling interest profit

 

6,152.2

5,061.7

1,090.5

21.5

Income tax expense (benefit)

 

2,007.2

1,806.0

201.2

11.1

Result in associates

 

(69.1)

(131.5)

62.3

(47.4)

Net finance (income) expense

 

320.7

(849.9)

1,170.5

(137.7)

Depreciation and amortization

 

1,505.2

1,441.8

63.4

4.4

EBITDA

 

9,916.2

7,328.2

2,588.0

35.3

EBITDA Margin (%)

 

10.0%

9.0%

-

-

Net revenues

 

98,890.7

81,699.1

17,191.6

21.0

EBITDA in 2022 reached $9,916.2 million, representing an EBITDA margin of 10.0%, compared to an EBITDA of $7,328.2 million in 2021, with an EBITDA margin of 9.0%.

BALANCE SHEET

BALANCE SHEET DATA

 

 

 

 

In millions of pesos

 

Dec. 31, 2022

Dec. 31, 2021

Change

 

 

$

$

$

%

TOTAL ASSETS

 

72,236.1

65,988.8

6,247.3

9.5

Cash and cash equivalents

 

20,049.5

20,777.0

(727.5)

(3.5)

Accounts receivable

 

5,860.8

5,108.5

752.4

14.7

TOTAL LIABILITIES

 

19,193.0

17,704.7

1,488.3

8.4

Accounts payable

 

6,841.2

10,200.7

(3,359.4)

(32.9)

Short-term debt

 

1,181.5

1,993.9

(812.4)

(40.7)

Long-term debt

 

3,010.5

-

3,010.5

-

TOTAL STOCKHOLDERS’ EQUITY

 

53,043.0

48,284.1

4,759.0

9.9

Capital stock

 

1,174.4

1,174.4

(0.0)

(0.0)

Cash and equivalents as of December 31st, 2022, totaled $20,049.5 million vs $20,777.0 million as of December 31st, 2021.

Total debt as of December 31st, 2022, was $4,192.0 million, compared to $1,993.9 million reported as of December 31st, 2021.

Net cash as of December 31st, 2022, was $15,857.4 million, compared to net cash of $18,783.1 million as of December 31st, 2021.

CAPITAL EXPENDITURES

In millions of pesos

 

2022

2021

Change

 

 

$

$

$

%

Capital Expenditures

 

4,666.2

3,479.5

1,186.7

34.1

Total CAPEX for 2022 was $4,666.2 million vs $3,479.5 million in 2021, mainly allocated toward organic growth and productivity projects across all our facilities.

STOCK INFORMATION

As of December 31, 2022

Total Shares

600,000,000

Total free float

12.32%

Market cap (millions of pesos)

$50,706

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

December

84.51

81.66

84.51

 

51.03

48.97

50.99

November

86.31

80.84

82.64

 

53.44

49.17

51.11

October

81.40

77.77

80.91

 

49.06

46.25

49.06

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

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 $19.51 per USD, which corresponds to the rate at the close of December 31st, 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

 

December 31,

 

December 31,

In million pesos

2022

 

2022

 

2021*

 
TOTAL ASSETS

$

3,702.5

72,236.1

65,988.8

 
Total current assets

 

2,047.9

 

39,955.0

 

37,845.6

 

Cash and cash equivalents

 

1,027.7

 

20,049.5

 

20,777.0

 

Total accounts receivable

 

300.4

 

5,860.8

 

5,108.5

 

Inventories

 

595.0

 

11,607.6

 

9,145.6

 

Other current assets

 

124.9

 

2,437.1

 

2,814.6

 

 
Total non current assets

 

1,654.6

 

32,280.5

 

28,143.2

 

Net property, plant and equipment

 

1,263.0

 

24,640.5

 

21,763.4

 

Other non current Assets

 

391.6

 

7,640.0

 

6,379.8

 

TOTAL LIABILITIES

$

983.8

 

19,193.0

 

17,704.7

 

 
Total current liabilities

 

541.2

 

10,558.4

 

12,835.3

 

Notes payable to banks

 

60.6

 

1,181.5

 

1,993.9

 

Accounts payable

 

350.7

 

6,841.2

 

10,200.7

 

Other taxes payable and other accruals

 

130.0

 

2,535.7

 

640.7

 

 
Total long-term liabilities

 

442.6

 

8,634.6

 

4,869.4

 

Long-term debt

 

154.3

 

3,010.5

 

-

 

Other non current liabilities

 

50.1

 

976.5

 

1,027.9

 

Deferred income taxes

 

238.2

 

4,647.5

 

3,841.5

 

 
TOTAL STOCKHOLDERS' EQUITY

$

2,718.8

 

53,043.0

 

48,284.1

 

 
Capital stock

 

60.2

 

1,174.4

 

1,174.4

 

Commission in shares issued

 

21.2

 

414.1

 

414.1

 

Repurchased shares

 

-

 

-

 

-

 

Retained earnings

 

2,573.1

 

50,201.5

 

45,038.6

 

Others accounts

 

43.4

 

846.3

 

1,179.2

 

Non controlling interest

 

20.8

 

406.7

 

477.7

 

 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

3,702.5

 

72,236.1

 

65,988.8

 

 
*Audited
CONSOLIDATED STATEMENT OF INCOME
Fourth Quarter Results, ended December 31st:
-Unaudited-

U.S. Dollar

 

 

 

 

In millions pesos

2022

 

2022

 

2021*

Net sales

$

1,211.4

 

23,633.8

 

21,251.5

 

Cost of sales

 

1,080.9

 

21,089.3

 

18,670.6

 

Gross profit

 

130.4

 

2,544.5

 

2,580.9

 

SG&A

 

115.0

 

2,243.8

 

2,002.2

 

Other income (expenses), net

 

0.3

 

5.9

 

(78.5

)

Operating income

 

15.7

 

306.6

 

500.2

 

Net finance income

 

(18.4

)

(359.3

)

167.6

 

Income tax

 

(5.7

)

(110.7

)

72.7

 

Net Income

$

3.0

 

58.0

 

595.1

 

 
Non-controlling interest

 

(1.10

)

(21.5

)

(45.7

)

Net controlling interest profit

 

4.07

 

79.5

 

640.8

 

Basic and diluted earnings per share

 

0.01

 

0.13

 

1.07

 

Basic and diluted earnings per ADR

 

0.08

 

1.59

 

12.82

 

Weighted average Shares outstanding1

 

599,380

 

599,380

 

599,624

 

 
EBITDA Result

$

35.6

 

694.6

 

850.0

 

 
Gross margin

 

10.8

%

10.8

%

12.1

%

Operating margin

 

1.3

%

1.3

%

2.4

%

Net margin

 

0.3

%

0.2

%

2.8

%

EBITDA margin

 

2.9

%

2.9

%

4.0

%

 
1 In thousands
* Audited
 
CONSOLIDATED STATEMENT OF INCOME
Annual Results
-Unaudited-

U.S. Dollar

 

 

 

 

In millions pesos

2022

 

2022

 

2021*

Net sales

$

5,068.7

 

98,890.7

 

81,699.1

 

Cost of sales

 

4,204.9

 

82,038.0

 

68,356.7

 

Gross profit

 

863.8

 

16,852.7

 

13,342.4

 

Selling, general and administrative expenses

 

434.7

 

8,480.4

 

7,133.3

 

Other income (expenses), net

 

2.0

 

38.8

 

(322.8

)

Operating income

 

431.1

 

8,411.0

 

5,886.4

 

Net finance income

 

(16.44

)

(320.7

)

849.88

 

Income tax

 

102.9

 

2,007.2

 

1,806.0

 

Net income

$

311.8

 

6,083.1

 

4,930.3

 

 
Non-controlling interest

 

(3.54

)

(69.1

)

(131.5

)

Net controlling interest profit

 

315.3

 

6,152.2

 

5,061.7

 

Basic and diluted earnings per share

 

0.53

 

10.26

 

8.44

 

Basic and diluted earnings per ADR

 

6.31

 

123.2

 

101.28

 

Weighted average Shares outstanding1

 

599,380

 

599,380

 

599,730

 

 
EBITDA Result

$

508.3

 

9,916.2

 

7,328.2

 

 
Gross margin

 

17.0

%

17.0

%

16.3

%

Operating margin

 

8.5

%

8.5

%

7.2

%

Net margin

 

6.2

%

6.2

%

6.0

%

EBITDA margin

 

10.0

%

10.0

%

9.0

%

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

U.S. Dollar

 

December 31,

2022

 

2022

 

2021*

 
NET MAJORITY INCOME BEFORE INCOME TAX

$

414.7

 

8,090.3

 

6,737.9

 

 
ITEMS RELATING TO INVESTING ACTIVITIES:

 

85.4

 

1,666.8

 

1,570.9

 

Depreciation and others

 

98.2

 

1,915.1

 

1,807.2

 

Income (loss) on sale of plant and equipment

 

3.5

 

69.1

 

95.3

 

Other Items

 

(16.3

)

(317.4

)

(331.6

)

 
NET CASH GENERATED FROM NET INCOME BEFORE TAXES

 

500.1

 

9,757.1

 

8,308.8

 

CASH GENERATED OR USED IN THE OPERATION:

 

(202.6

)

(3,952.1

)

(120.1

)

Decrease (increase) in accounts receivable

 

(36.1

)

(704.6

)

(811.6

)

Decrease (increase) in inventories

 

(145.4

)

(2,836.0

)

(732.3

)

Increase (decrease) in accounts payable

 

(127.6

)

(2,490.1

)

3,988.3

 

Other Items

 

106.5

 

2,078.6

 

(2,564.5

)

 
NET CASH FLOW FROM OPERATING ACTIVITIES

 

297.5

 

5,805.0

 

8,188.7

 

 
NET CASH FLOW FROM INVESTING ACTIVITIES

 

(215.9

)

(4,211.8

)

(2,382.7

)

Acquisition of property, plant and equipment

 

(238.2

)

(4,647.7

)

(3,479.5

)

Proceeds from sales of property plant and equipment

 

4.3

 

83.3

 

29.8

 

Other Items

 

18.1

 

352.5

 

1,067.1

 

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

 

81.7

 

1,593.2

 

5,806.0

 

 
Net cash provided by financing activities:

 

(115.4

)

(2,250.8

)

(4,341.3

)

Proceeds from loans

 

239.7

 

4,676.0

 

1,709.1

 

Principal payments on loans

 

(127.0

)

(2,477.9

)

(2,267.3

)

Dividends paid

 

(50.4

)

(983.0

)

(853.6

)

Other items

 

(177.7

)

(3,466.0

)

(2,929.5

)

Net increase (decrease) in cash and equivalents

 

(33.7

)

(657.7

)

1,464.7

 

 
Cash and investments at the beginning of year

$

1,061.4

 

20,707.1

 

19,242.4

 

CASH AND INVESTMENTS AT END OF PERIOD

$

1,027.7

 

20,049.5

 

20,707.1

 

 
*Audited

DERIVATIVES POSITION REPORT

 
Fourth Quarter 2022
Thousands of Mexican Pesos, as of December 31, 2022
TYPE OF FINANCIAL

INSTRUMENT
OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE

BY YEAR
GUARANTIES

REQUIRED
4Q-2022 3Q-2022 4Q-2022 3Q-2022
Forward Vanilla y KO Fwd Hedge

$

190,950

$

19.51

$

20.13

$

-136,757

$

-48,982

95% in 2023

and 5% in 2024
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

$

442,441

CORN CORN

$

16,178

$

12,462

100% in 2023
In USD per Bushel In USD per Bushel
month price month price
Mar-23

$

6.785

May-23

$

6.780

Jul-23

$

6.718

Sep-23

$

6.270

Dec-23

$

6.108

Dec-22

$

6.775

SOYBEAN MEAL SOYBEAN MEAL
In USD per ton In USD per ton
month price month price
Mar-23

$

471.0

May-23

$

461.0

Jul-23

$

454.3

Aug-23

$

443.1

Sep-23

$

428.2

Oct-23

$

413.6

Dec-23

$

411.6

Dec-22

$

403.0

SOYBEAN OIL SOYBEAN OIL
In US cents per pound In US cents per pound
Month Price Month Price
Mar-23

$

64.07

May-23

$

63.94

Jul-23

$

63.56

Dec-22

$

61.56

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

$

6.77

Dec-22

$

7.07

Jan-23

$

7.25

Feb-23

$

4.475

Feb-23

$

6.94

Options of Corn Hedge

$

890,801

CORN CORN

$

25,296

$

37,181

95% in 2023

and 5% in 2024
In USD per Bushel In USD per Bushel
month price month price
Mar-23

$

6.785

May-23

$

6.780

Jul-23

$

6.718

Sep-23

$

6.270

Dec-23

$

6.108

Dec-22

$

6.775

Mar-24

$

6.180

Mar-23

$

6.840

Options of soybean meal Hedge

$

950,696

SOYBEAN MEAL SOYBEAN MEAL

$

109,976

$

12,013

89% in 2023

and 11% in 2024
In USD per ton In USD per ton
month price month price
Mar-23

$

471.0

May-23

$

461.0

Jul-23

$

454.3

Aug-23

$

443.1

Sep-23

$

428.2

Oct-23

$

413.6

Dec-22

$

403.0

Dec-23

$

411.6

Jan-23

$

401.3

Jan-24

$

408.8

Mar-23

$

397.2

Mar-24

$

402.9

May-23

$

395.0

Options of Soybean oil Hedge

-$

3,750

SOYBEAN OIL

$

-

$

-

100% in 2023
In US cents per pound
Mes Precio
Feb-23

$

64.07

 
-The total financial instruments do not exceed 5% of total assets as of December 31, 2022.
-The notional value represents the net position as of December 31, 2022 at the exchange rate of Ps.19.51 per one dollar.
-A negative value means an unfavorable effect for the Company.
Fourth Quarter 2022
Thousands of Mexican Pesos, as of December 31, 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

-$

136,757

$

19.02

 

$

20.00

 

$

20.48

 

Direct

-$

229,887

 

-$

43,623

 

$

49,506

 

 

-5

%

 

5

%

 

10

%

 

-5

%

 

5

%

 

10

%

Futures of Corn: (2)

$

16,178

 

$

6.45

 

$

7.12

 

$

7.46

 

The effect will

materialize as the

inventory is consumed

-$

5,945

 

$

38,301

 

$

60,424

 

Futures of Soybean Meal: (2)

$

447.5

 

$

494.6

 

$

518.1

 

Futures for Soy Oil (2)

$

60.9

 

$

67.3

 

$

70.5

 

Futures for Natural Gas (2)

$

4.3

 

$

4.7

 

$

4.9

 

Options for Corn

$

25,296

 

$

6.45

 

$

7.12

 

$

7.46

 

-$

16,930

 

$

67,521

 

$

109,747

 

Options of Soybean Meal

$

109,976

 

$

447.5

 

$

494.6

 

$

518.1

 

$

62,438

 

$

157,513

 

$

205,050

 

Options of Soybean Oil

$

-

 

$

60.87

 

$

67.27

 

$

70.48

 

$

125

 

$

-

 

$

-

 

 
(1) The reference value is the exchange rate of Ps. $19.51 per USD as of December 31, 2022.
(2) The reference values are: future of corn Mar 2023, $6.7850 USD/bushel, the future of soybean meal Mar 2023, $471.00 USD/ton, the future of soybean oil Mar 2023, $64.07 usd cts / pound and the future of natural gas Feb 2023, $4.48 usd/ 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.
Fourth Quarter 2022
Thousands of Mexican Pesos, as of December 31, 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 -$ 136,757

$

9.75

 

$

14.63

 

$

24.39

 

$

29.26

 

Direct -$ 1,999,432 -$ 1,068,092

$

547,632

 

$

1,228,504

 

CONFERENCE CALL INFORMATION

The Company will host its fourth quarter 2022 earnings call, on Friday, February 10th, 2023. The earnings call will take place at 11:00 am Central Time (12:00 pm ET).

Mexico (Main number):

55 4742 9168

Mexico (Altern number):

55 4742 9169

USA/ Canada:

+1 (888) 207 2216

International:

+1 (800) 750 9038

 

 

Access Code: 2603

 

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.

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