MONTERREY, MEXICO — Operating income at Gruma USA in the third quarter ended Sept. 30 totaled 1,561 million pesos ($81.8 million), up 7% from 1,453 million pesos in the same period a year ago.
Net sales at Gruma USA increased 6% in the third quarter of fiscal 2019 to 11,111 million pesos ($582 million) from 10,512 million pesos.
Gruma said sales in the third quarter were driven by “volume growth and higher average prices, especially at the retail tortilla business, mostly because of the sales mix favoring higher-priced s.k.u.s (stock-keeping units), in particular carb-balance, gluten-free, super soft wheat flour, street tacos flour and corn and medium count corn. Also, food service contributed to the improvement due to increased sales of healthier s.k.u.s to restaurant chains and price increases implemented in early 2019. The sales volume mix favoring corn flour partially offset the benefit from higher average prices at the tortilla business.”
EBITDA rose 14%, and EBITDA margin improved 150 basis points to 18.8% versus last year.
Gruma said operating margin at Gruma USA improved to 14.1% from 13.8% during the third quarter.
Cost of sales as a percentage of net sales improved to 57.8% from 58.2%.
“The better sales mix at the tortilla business and lower wheat flour costs more than offset cost pressures arising primarily from labor and electricity; higher depreciation reflecting primarily the new Dallas plant and other projects to increase production capacity; and the negative impact from the sales volume mix favoring corn flour, which generates lower gross margins than tortillas,” Gruma said.
Gruma said it incurred $17 million in capital expenditures during the third quarter. During the quarter, the company allocated expenditures to capacity expansions, primarily in Dallas, for wheat flour tortillas and corn chips; in Malaysia for wheat flour tortillas and pizza crusts; and Tijuana, in Northwestern Mexico, for tostados. 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 third quarter was 1,304 million pesos, up 2% from 1,275 million pesos a year ago. EBITDA was 3,299 million pesos, up 9% from 3,023 million pesos, while sales rose 8% to 20,053 million pesos from 18,488 million pesos.