MONTERREY, MEXICO — Operating income at Gruma USA in the second quarter ended June 30 totaled 1,566 million pesos ($82 million), up 3% from 1,514 million pesos in the same period a year ago.
Net sales at Gruma USA increased 4% in the second quarter of fiscal 2019 to 10,618 million pesos ($556 million) from 10,186 million pesos.
“Our Gruma USA sales volume rose 3% versus last year and 6% versus the first quarter driven mainly by the corn flour operations,” Raul Cavazos Morales, chief financial officer, said during a July 25 conference call with analysts. “Net sales increased 4% versus last year and first quarter due to volume growth and higher average prices of the tortilla business derived from a better sales mix.
“EBITDA rose 10%, and EBITDA margin improved 100 basis points to 19.1% versus last year.”
Gruma said operating margin at Gruma USA declined to 14.7% from 14.9% during the second quarter.
Cost of sales as a percentage of net sales was basically flat at 57.2%. Gruma said it has been able to largely offset increasing cost pressures arising mostly from labor transportation and packaging, with the sales mix change favoring higher margin stock-keeping units and efficiencies in production and logistics.
Gruma said it incurred $20 million in capital expenditures during the second quarter. During the quarter, the company allocated expenditures to capacity expansions, primarily at tortilla plants in Malaysia for wheat flour tortillas; Puebla, in Central Mexico, for corn crackers; and Tijuana, in Northwestern Mexico, for corn chips. Gruma said capital expenditures also were allocated to maintenance and general technology upgrades.
Overall, majority net income at Gruma S.A.B. de C.V. in the second quarter was 1,268 million pesos, down 3% from 1,308 million pesos a year ago. EBITDA was 3,178 million pesos, up 3% from 3,097 million pesos, while sales rose 2% to 19,314 million pesos from 18,942 million pesos.