MONTERREY, MEXICO — In the year ended Dec. 31, 2018, Gruma USA had operating income of 5,890 million pesos ($308.7 million), up 4% from 5,681 million pesos in 2017. For the fourth quarter ended Dec. 31, operating income increased narrowly to 1,440 million pesos from 1,435 million pesos.
Net sales at Gruma USA increased 2% in fiscal 2018 to 41,305 million pesos ($2,164.7 million), up from 40,363 million pesos. For the fourth quarter, net sales increased 1% to 10,187 million pesos from 10,133 million pesos.
Gruma said operating margin improved to 14.3% from 14.1% during the full year and fell to 14.1% from 14.2% in the fourth quarter.
Cost of sales as a percentage of net sales improved to 56.9% from 55.5% in the fourth quarter, Gruma said, driven mainly by the adoption of IFRS 15, which resulted in lower cost absorption of 130 basis points. Gruma said gross margin also was affected by higher depreciation, primarily reflecting a new plant in Dallas, higher labor, health care and insurance costs, and sales mix that favored the corn flour business.
Gruma said it spent $81 million on capital expenditures during the fourth quarter and $209 million for the full year. During the fourth quarter, the company allocated expenditures to the United States (in connection with additional production lines at a tortilla plant in Dallas, warehousing expansions at a tortilla plant in Georgia and capacity expansions at a tortilla plant in Florida), to Europe (in connection with a tortilla plant in Russia and packaging automation at a flatbread plant in England) and to Mexico (for a tortilla plant in Central Mexico).