Gruma majority net posts sharp gain in quarter

by Eric Schroeder
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MONTERREY, MEXICO — Gruma S.A.B. de C.V. posted majority net income of 437 million pesos ($32.6 million) in the second quarter ended June 30, up sharply from 106 million pesos in the same period in fiscal 2011.

Sales totaled 16,304 million pesos ($1,215 million), up 21% from 13,469 million pesos in the same period a year ago. The company said sales growth reflected price increases across most subsidiaries, the effect of the peso depreciation on foreign subsidiaries, and sales volume growth.

Operating income at Gruma Corp. totaled 336 million pesos ($25 million), up 82% from 184 million pesos in the second quarter of fiscal 2011. Net sales totaled 6,864 million pesos ($511 million), up 9% from 6,325 million pesos a year ago. Sales volume at Gruma Corp. grew 9%.

“Approximately 80% of the increase resulted from the acquisitions made during 2011,” Gruma said. “There was organic growth, especially in the European operations in connection with new and increased customer accounts throughout most of the business segments.”

Cost of sales as a percentage of net sales at Gruma improved to 65.5% from 66.5%, driven largely by the lower cost of wheat, more effective allowances and better absorption in connection with price increases, especially in the U.S. tortilla business.

Operating income at GIMSA totaled 492 million pesos ($36.7 million), up 4% from 474 million pesos in the same period a year ago. Net sales totaled 4,427 million pesos ($330 million), up 22%. Sales volume at GIMSA increased 5% to 493,000 tonnes, due mainly to higher corn flour sales to tortilla makers, and other non-corn flour products, the company said.

Gruma said its capital expenditure program totaled $46 million during the second quarter, most of which was applied to the U.S. operations for technology upgrades and capacity expansions at existing plants, as well as for the construction of a tortilla plant in Florida that is expected to be completed in the fourth quarter.

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