Low volumes bog down Bimbo U.S. operating profit
by Eric Schroeder
MEXICO CITY — Operating profit in the United States of Grupo Bimbo S.A.B. de C.V. in the first quarter ended March 31 was NP891 million ($77 million), down 8% from NP973 million a year ago. Sales fell 4% to NP11,017 million ($952 million) from NP11,434 million.
“Performance reflected the effect of better pricing as well as good volume growth in Bimbo Bread, sweet baked goods and Thomas’ English muffins; however, this was not sufficient to offset lower overall volumes across the region,” Grupo Bimbo said.
Overall net majority income of Grupo Bimbo was NP1,197 million ($103 million), down 6% from NP1,270 million in the same period of fiscal 2010. Sales, meanwhile, rose 3%, climbing to NP29,312 million ($2,533 million) from NP28,334 million.
“Performance in the first three months of the year reflected good sales growth despite a continuation of the underlying macroeconomic trends seen in the past several quarters: a weak consumption environment, the negative impact of FX rates on dollar-denominated sales and pressure on commodities,” Grupo Bimbo said.
Profit margins were under pressure which the company said “reflected commodity pressures across all regions, particularly in wheat, oils and sugar, as well as higher labor costs in Latin America.”
Higher prices and productivity improvements in the United States were a partial offset, Bimbo said.
Overall, the company’s consolidated gross operating margin narrowed by 1 percentage point, to 51.3%.
In the Mexico division, operating profit was NP1,574 million ($136 million), down narrowly from NP1,587 million in the same period of fiscal 2010. Net sales were up 7% to NP15,331 million ($1,324 million) from NP14,300 million.
In Latin America, Grupo Bimbo sustained a loss of NP107 million ($9.2 million), which compared with an operating profit of NP48 million in the same period a year ago. Net sales rose to NP3,690 million ($319 million) from NP3,240 million.