Gruma income rises 63% in quarter

by Eric Schroeder
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MEXICO CITY — Operating income of Gruma Corp., the U.S. and U.K. segment of Gruma S.A.B. de C.V., in the quarter ended Sept. 30 was 595 million pesos ($45.9 million), up 63% from 364 million pesos in the third quarter last year.

Sales were 7,180 million ($553.3 million), up 6%. Sales volume was up 2% to 408,000, driven primarily by a 3% gain in tortilla volumes in European operations. U.S. tortilla sales volume was flat, while corn flour decreased 2% in connection with measures implemented to improve profitability.

Cost of sales as a percentage of net sales improved to 63.3% from 65%, driven mainly by U.S. tortilla operations, Gruma said.

“However, the U.S. corn flour and European operations also performed better,” the company said. “Improvements at Gruma Corp. resulted mainly from the aforementioned price increases as well as the shift and focus toward high-margin high-volume products, as in the case of wheat tortillas. Also, the company benefitted from the s.k.u. (stock-keeping unit) rationalization programs. Europe also improved due to higher prices and a shift in the sales mix toward high-margin products.

“In absolute terms, cost of sales rose 3% to 4,548 million pesos, mainly reflecting sales volume growth, and higher costs related to the new Florida tortilla plant.”

Operating margins improved to 8.3% from 5.4%.

Majority net income of Gruma S.A.B. de C.V. in the third quarter was 631 million pesos ($48.7 million), up 136% from 267 million pesos in the third quarter of 2012. Net sales were 13,804 million pesos ($1,065 million), up 1% versus the year earlier period.

Gruma attributed the increase in income to improved operational performance and, to a lesser extent, lower minority interest in connection with the acquisition from ADM.
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