CONFORMED
Securities and Exchange Commission
Washington, D.C. 20549
 
FORM 6-K
 
Report of Foreign Issuer
Pursuant to Rule 13a-16 Or 15d-16
Of The
Securities Exchange Act of 1934
 
For the month of July 24, 2008
 
BACHOCO INDUSTRIES
(Translation of Registrant’s name into English)
 
Avenida Tecnológico No. #401
38010 Celaya, Guanajuato
(Address of principal office)
 
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F Form 40-F o

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g-3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o No x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82__.)


 
Industries banchoo
Industrias Bachoco Announces Second Quarter 2008 Results

Celaya, Mexico, - July 24, 2008 - Industrias Bachoco S.A.B. de C.V. (“Bachoco” or “the Company”) (NYSE: IBA; BMV: Bachoco), Mexico’s leading producer and processor of poultry products, today announced its unaudited results for the second quarter ended June 30, 2008. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, 2008 data is presented in nominal pesos while that of 2007 is presented in constant pesos as of December 31, 2007.

Highlights:
 
·
The Company recorded sales of Ps. 4,987.5 million during the second quarter of 2008, 3.0% above the Ps. 4,842.1 million reached during the same period last year.
 
·
Bachoco sales increased in most of its business lines: chicken, eggs, swine and other.
 
·
The company reached positive operating results during the quarter, with an operating margin of 6.2% and EBIDTA margin of 9.2%.
 
·
EPS were Ps. 0.32 (US$ 0.38 per ADS) versus Ps. 0.80 (US$ 0.93 per ADS) reached in 2Q07.
 
CEO’s Comments:


Cristobal Mondragon, Bachoco’s CEO, stated, “Second quarter results continued largely affected by the global trend of higher raw materials prices, which continued to affect the cost of grain and soybean meal. The cost of these ingredients rose even higher during this quarter and reached record levels. These increases coupled with a sluggish economic condition in our markets that did not allow us to fully transfer cost increases into chicken prices, and continued to affect the Company’s results.

“Despite said adverse difficulties, we were able to deliver positive results given our focus to reinforce productivity, and optimize our product mix, while keeping the best level of service for our customers.

“Our commitment will continue to satisfy your customers' needs by providing high quality products, delivering satisfactory results to our shareholders and continuing to implement our growth plans.” concluded Mr. Mondragon.
 
Releases during the quarter:
·
On April 16 the Company announced a partial fire at the secondary process of its plant located in Monterrey in northern Mexico.
·
On May 29 the Company announced the construction of new farms to be built in the south of México.
To see the complete version of these releases, please visit our web page. http://www.bachoco.com.mx
 
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Industries banchoo
 
SECOND QUARTER 2008 RESULTS
 
Net Sales
Net sales for the quarter reached Ps. 4,987.5 million, 3.0% above the Ps. 4,842.1 million reported in 2Q07. This increase was mainly driven by the 1.3% increase in chicken sales, 15.9% in table eggs sales and 61.4% in swine sales, which was partially offset by 7.2% decrease in balanced feed sales. 
 
Net Sales
 
2Q08 (%)
 
2Q07 (%)
 
CHICKEN
   
77.8
   
79.1
 
EGGS
   
9.4
   
8.3
 
BALANCED FEED
   
7.4
   
8.2
 
SWINE
   
1.1
   
0.7
 
OTHER LINES
   
4.3
   
3.7
 
TOTAL COMPANY
   
100.0
   
100.0
 
 
Operating Results
Bachoco’s second quarter gross margin was 17.9%, lower than 23.1% reached in 2Q07. The decrease is mainly attributed to the constant increases in raw materials cost. The Company’s operating profit was Ps. 311.6 million lower than Ps. 559.6 million reached in 2Q07. EBITDA for the quarter was Ps. 460.3 million, with a margin of 9.2%, lower than Ps. 698.5 million reached in the same period of 2007.

Taxes
Taxes recognized by the Company during the second quarter were Ps. 54.2 million.

Net Income
Net income for second quarter 2008 was Ps. 194.4 million, or Ps. 0.32 per share (US$0.38 per ADS), compared to net income of Ps. 479.2 million, or Ps. 0.80 per share (US$0.93 per ADS) reported in the same 2007 period.

RESULTS BY BUSINESS SEGMENT

Chicken
Chicken sales rose 1.3% during 2Q08 as a result of 1.4% increase in price while volume sold remained at the same level of 2Q07. At the beginning of the quarter, chicken prices remained at a good level, but the situation changed towards the end of the quarter, as chicken prices dropped lower than expected.
 
Table Eggs
During this quarter sales of table eggs were stronger, increasing by 15.9% from the same quarter last year, as a result of 23.8% increase in egg prices, due partially to a better balance in the market supply, as well as a better product mix of the company’s products, with both issues contributing to partially offsetting a 6.4% decrease in volume.
 
Balanced Feed
Sales of Balanced Feed declined 7.2% when compared with 2Q07, despite a 16.9% price increase. Volume of balance feed sold dropped 20.7%, as a result of the large period of higher costs in our main raw material.
 
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Industries banchoo
 
Swine
Sales of swine increased 61.4.0% from the previous year, the strong increase stems from a 23.8% volume gain and a 30.4% increase in swine prices, as the Mexican market’s swine oversupply softened.

Other Lines
Sales of other lines rose 21.1% during 2Q08, mainly as a result of increases in sales of turkey and other lines.

FIRST HALF OF 2008

Net Sales
Net sales for the first half of 2008 amounted to Ps. 9,730.8 million, 9.2% above Ps. 8,913.0 million reported in 1H07. The increase was mainly driven by the 8.1% increase in chicken sales, 20.8% in table eggs sales and 35.2% in swine sales, which was partially offset by 0.6% decrease in sales of balanced feed.
 
Net Sales
 
1H 2008
(%)
 
1H 2007
(%)
 
CHICKEN
   
77.0
   
77.8
 
EGGS
   
10.3
   
9.4
 
BALANCED FEED
   
7.6
   
8.3
 
SWINE
   
1.0
   
0.8
 
OTHER LINES
   
4.1
   
3.8
 
TOTAL COMPANY
   
100.0
   
100.0
 
 
Operating Results
Bachoco’s gross margin for the first half was 17.7%, lower than 21.0% in 1H07. The decrease is directly attributed to the standing increases in raw materials costs. The Company’s operating profit was Ps. 556.0 million lower than Ps. 786.8 million reached in 1H07. EBITDA was Ps. 853.7 million; lower than Ps. 1,066.4 million in the same period of 2007. EBITDA margin was 8.8%.

Taxes
Taxes recognized by the Company during the first half of the year were Ps. 117.3 million.

Net Income
Net income for first half of the year was Ps. 425.2 million, or Ps. 0.71 per share (US$0.83 per ADS), compared to net income of Ps. 728.0 million, or Ps. 1.21 per share (US$1.41 per ADS) reported in the same 2007 period.

Balance Sheet
The Company’s financial structure remained healthy. Liquidity is solid with cash and cash equivalents of Ps. 2,878.8 million as of June 30, 2008. Total debt outstanding was Ps. 72.7 million as of June 30, 2008.
CAPEX during the first half of 2008 amounted to Ps. 685.7 million.
 
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Adoption of New Accounting Standards
As of January 1, 2008, the Company has adopted the changes to “Inflationary Effects” in accordance with the Mexican Accounting Principles. Due to the relatively low inflation that the country has consistently achieved during the past several years, a new accounting principle went into effect on January 1, 2008, which eliminates the recognition of inflationary effects in its financial information. Consequently, financial information corresponding to the year 2007 is expressed in millions of Mexican pesos with purchasing power as of December 31, 2007, while the financial information for the year 2008 is stated in current or nominal Mexican pesos.

Company Description

Industrias Bachoco S.A.B. de C.V. (also referred in this report as Bachoco) was founded in 1952. The Company is the largest poultry company in Mexico, with over 700 production and distribution facilities currently organized in nine complexes throughout the country. Bachoco’s main business lines are chicken, eggs and balanced feed, and the Company also is present in other business like swine, beef, margarine and turkey. The Company’s headquarters are in Celaya, Guanajuato.
 
Industrias Bachoco made an initial public stock offering in September 1997. Its securities are listed and traded on the BMV (Bachoco) and on the NYSE (IBA).

For more information, please visit Bachoco’s website at http://www.bachoco.com.mx or contact our IR department.
 
This press release contains certain forward-looking statements that are subject to a number of uncertainties, assumptions and risk factors that may influence its accuracy. Actual results may differ. Factors that could cause these projections to differ, include, but are not limited to: supply and demand, industry competition, environmental risks, economic and financial market conditions in Mexico and operating cost estimates. For more information regarding Bachoco and its outlook, please contact the Company’s Investor Relations Department.
Industries banchoo
 

 
INDUSTRIAS BACHOCO, S.A.B. DE C.V.
Consolidated Statements of Income
 
    
SECOND QUARTER
 
FIRST HALF
 
   
U.S.D.
 
Mexican Pesos
 
U.S.D.
 
Mexican Pesos
 
   
2008(1)
 
2008(2)
 
2007(3)
 
2008(1)
 
2008(2)
 
2007(3)
 
 
                         
Net Sales
 
$
484
 
Ps
4,987
 
Ps
4,842
 
US
944
  Ps
9,731
 
Ps
8,913
 
Cost of Sales
   
397
   
4,093
   
3,721
   
777
   
8,011
   
7,041
 
Gross Profit (loss)
   
87
   
895
   
1,121
   
167
   
1,720
   
1,872
 
Selling, general and administrative expenses
   
57
   
583
   
561
   
113
   
1,164
   
1,086
 
Operating Income (loss)
   
30
   
312
   
560
   
54
   
556
   
787
 
Comprehensive financing (cost) income
   
(5
)
 
(47
 
38
   
(2
)
 
(17
)
 
99
 
Interest income
   
3
   
31
   
69
   
9
   
98
   
154
 
Interest expense and financing cost
   
5
   
49
   
20
   
7
   
70
   
37
 
Forein exchange gain (loss), net
   
(3
)
 
(30
)
 
(11
)
 
(4
)
 
(45
)
 
(18
)
Other income (expense) net
   
(1
)
 
(14
)
 
12
   
1
   
6
   
54
 
Income before income tax, asset tax
   
24
   
250
   
610
   
53
   
545
   
939
 
Total income taxes
   
5
   
54
   
131
   
11
   
117
   
209
 
Income tax, asset tax
   
2
   
24
   
23
   
12
   
127
   
72
 
Deferred income taxes
   
3
   
30
   
108
   
(1
)
 
(9
)
 
138
 
Net Income
 
$
19
 
Ps
196
 
Ps
479
 
 
42
 
 
428
   
730
 
Minority net income
   
0
   
2
   
0
   
0
   
2
   
2
 
Mayority net income
   
19
   
194
   
479
   
41
   
425
   
728
 
weighted average shares outstanding (in thousands)
   
600,000
   
600,000
   
600,000
   
600,000
   
600,000
   
600,000
 
Net mayority Income per share (in U.S.D per ADR)
   
0.38
   
0.32
   
0.80
   
0.83
   
0.71
   
1.21
 

(1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035)
(2) Million of constant pesos as of June 30, 2008
(2) Million of constant pesos as of December 31, 2007


 
Condensed Consolidated Balance Sheets
 
   
U.S.D.
 
Mexican Pesos
 
   
2008(1)
 
2008(2)
 
2007(3)
 
ASSETS
                   
Current assets
                   
Cash and cash equivalents
 
$
279
  Ps 
2,879
 
Ps
3,480
 
Total accounts receivable
   
124
   
1,283
   
946
 
Inventories
   
434
   
4,473
   
3,838
 
Other current assets
   
-
   
-
       
Total current assets
   
838
   
8,634
   
8,264
 
Net property, plant and equipment
   
1,032
   
10,637
   
9,829
 
Other non current assets
   
36
   
374
   
378
 
TOTAL ASSETS
 
$
1,907
 
Ps
19,645
 
Ps
18,470
 
 
                     
LIABILITIES
                   
Current liabilities
                   
Notes payable to banks
   
6
   
67
   
61
 
Accounts payable
   
131
   
1,348
   
848
 
Other taxes payable and other accruals
   
59
   
611
   
573
 
Total current liabilities
   
197
   
2,025
   
1,482
 
Long-term debt
   
7
   
73
   
62
 
Labor obligations
   
5
   
56
   
44
 
Deferred income taxes and others
   
188
   
1,937
   
2,338
 
Total long-term liabilities
   
201
   
2,066
   
2,445
 
TOTAL LIABILITIES
 
$
397
 
Ps
4,091
 
Ps
3,926
 
STOCKHOLDERS' EQUITY
                   
Majority stockholder's equity:
                   
Capital stock
   
223
   
2,295
   
2,295
 
Pain-in capital
   
64
   
660
   
660
 
Reserve for repurchase of shares
   
24
   
244
   
244
 
Retained earnings
   
1,471
   
15,156
   
14,250
 
Net majority income of the year
   
41
   
425
   
728
 
Deficit from restatement of stockholder's equity
   
(363
)
 
(3,738
)
 
(3,664
)
Derivate financial instruments
   
46
   
469
   
(15
)
Total majority stockholder's equity
   
1,505
   
15,510
   
14,498
 
Minority interest
   
4
   
44
   
46
 
TOTAL STOCKHOLDERS' EQUITY
   
1,510
   
15,554
   
14,544
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
1,907
 
Ps
19,645
 
Ps
18,470
 

(1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035)
(2) Million of constant pesos as of June 30, 2008
(2) Million of constant pesos as of December 31, 2007


 
Industrias Bachoco, S.A.B. de C.V.
Condensed Consolidated Statements of Changes in Financial Position
 
   
U.S.D.
 
Mexican Pesos
 
   
2008(1)
 
2008(2)
 
2007(3)
 
               
Operating Activities:
                   
Net Income
 
$
42
  Ps.
428
 
Ps.
730
 
Adjustments to Reconcile Net Income to Resources
                   
Provided by Operating Activities:
                   
Depreciation and Others
   
29
   
295
   
278
 
Changes in Operating Assets and Liabilities
   
35
   
357
   
(900
)
Deferred Income Taxes
   
(42
)
 
(438
)
 
156
 
Resources Provided by Operating Activities
 
$
62
 
Ps.
643
 
Ps.
264
 
 
                   
Financing Activities:
                   
Increase of Capital Stock
   
0
   
0
   
(0
)
Proceeds from Long-term Debt
   
-
   
-
   
32
 
Proceeds from Short-term Debt
   
12
   
123
   
51
 
Repayment of Long-term Debt and Notes Payable
   
9
   
94
   
(5
)
Decrease in Long-term Debt in Constant Pesos
   
(18
)
 
(187
)
 
(0
)
Cash Dividends Paid
   
(11
)
 
(118
)
 
(122
)
Resources Provided by (Used in) Financing Activities
 
$
(9
)
Ps.
(88
)
Ps.
(44
)
 
                   
Investing Activities:
                   
Acquisition of Property, Plant and Equipment
   
(67
)
 
(686
)
 
(287
)
Minority Interest
   
(0
)
 
(3
)
 
1
 
Others
   
(3
)
 
(27
)
 
(38
)
Resources Used in Investing Activities
 
$
(69
)
Ps.
(715
)
Ps.
(324
)
 
                   
Net (Decrease) Increase in Cash and Cash
                   
Equivalents
 
$
(16
)
Ps.
(161
)
Ps.
(104
)
 
                   
Cash and Cash Equivalents at Beginning of Period
   
295
   
3,040
   
3,584
 
 
                   
Cash and Cash Equivalents at End of Period
 
$
279
 
Ps.
2,879
 
Ps.
3,480
 

(1) Million of U.S. dollar (Peso at the rate of Ps. 10.3035)
(2) Million of constant pesos as of June 30, 2008
(2) Million of constant pesos as of December 31, 2007
 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     
Industrias Bachoco, S.A. de C.V.
     
(Registrant)
       
       
Date: July 24, 2008
By
/s/ Daniel Salazar Ferrer, CFO