In a press release dated February 4th. Industrias Bachoco S.A.B. ds C.V. (IBA) announced results for the 4th Quarter and Fiscal 2019 ending December 31st 2019.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 applying a conversion of 18.8 pesos = US$1)
|
4th Quarter Ending
|
Dec. 31st 2019
|
Dec 31st 2019
|
Difference (%)
|
|
Sales:
|
$805,200
|
$820,266
|
-1.8
|
|
Gross profit:
|
$104,600
|
$114,271
|
-8.5
|
|
Operating income:
|
$12,900
|
$26,042
|
-50.5
|
|
Net Income
|
$8,600
|
$37,840
|
-77.3
|
| |
|
|
|
|
Gross Margin (%)
|
12.9
|
13.9
|
-7.2
|
|
Operating Margin (%)
|
1.6
|
3.2
|
-50.0
|
|
Profit Margin (%)
|
1.1
|
4.6
|
-76.1
|
|
Long-term Debt:
|
$79,149
|
$82,135
|
-3.6
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
4.4
|
|
|
|
Return on Equity (%)
|
8.1
|
|
|
|
Operating Margin (%)
|
0.5
|
|
|
|
Profit Margin (%)
|
5.1
|
|
|
|
Total Assets
|
$2,966,117
|
$2,812,021
|
+5.5
|
|
Market Capitalization
|
$2,430,000
|
|
|
For FY 2019 IBA earned $167.7 million on sales of $3.26 billion. Comparative figures for FY 2018 were net earnings of $178.8 on revenue of $3.25 billion
Poultry (broilers and table eggs represented 90.3 percent of sales in FY 2019
U.S. sales (OK Foods) represented 27.5 percent or revenue for FY 2019
52-Week Range in Share Price: $ 43.47 to $ 57.00 50-day moving average $50.54
Market Close Tue. Feb. 4th. $47.99. Close Monday Fe
b. 10 th 48.50
Forward P/E 11.8 Beta 0.4
In commenting on Q4 results, Rodolfo Ramos Arvizu, CEO of Bachoco, stated: "Under challenging conditions by the end of the year, particularly regarding economic growth in Mexico, we managed to end 2019 with positive results versus 2018 in terms of profitability, despite a difficult fourth quarter of FY 2019.
In Mexico, during the quarter, we observed some oversupply conditions in poultry which, in combination with a softer demand, pressured down our prices and volume, particularly in our traditional channels.
On the other hand, in the U.S. industry, towards the end of the quarter, we observed some recovery in prices particularly for leg quarters. However, lower volume sold and the appreciation of the Mexican peso versus the U.S. dollar negatively impacted us in this segment.
As a result, we reported a decrease in total sales of 1.8% in Q4 FY2019 when compared to Q4 FT 2018. For the full year, we reached an increase of 1.0% compared to 2018.
Regarding cost of sales, even when prices of grain negatively impacted our feed cost quarter over quarter, efficiencies in our feed conversion and the appreciation of the Mexican peso against the U.S. dollar allowed us to offset the increase in raw materials.