MONTERREY, MEXICO — Market dynamics and fundamentals “unfolded better than expected” during the first quarter at Gruma SAB de CV, particularly in the company’s US operations.
“We experienced resilient demand for both of our main products but led by the expansion in the US business, as a result of a positive performance from our ‘Better for You’ product line and higher corn flour consumption in both the US and Mexico,” the company said. “We are pleased with our performance, which delivered consolidated sales growth of 25% and EBITDA growth of 28% stemming from the US division´s performance. We remain committed to protect profitability going forward, which grew 22% in terms of EBITDA per ton, our internal profitability measure, but also cautious about a potential change in consumer behavior, for which we are prepared should it take place during the year.”
Operating income at Gruma USA in the first quarter ended March 31 totaled $124.5 million, up 14% from $83.3 million in the same period a year ago. Net sales increased 22% to $887.2 million from $724.6 million, while sales volume rose 2%.
Gruma said operating margin at Gruma USA increased 250 basis points during the first quarter to 14% from 11.5%. Meanwhile, cost of sales as a percentage of net sales improved to 59.1% from 60.1% in the first quarter, resulting mostly from higher raw material costs, higher labor costs and greater volume, Gruma said.
“Demand for our product line in the US started the year at a great pace and with no signs of down trading at this point,” Gruma said. “Profitability has increased as measured by EBITDA per ton as part of our commitment to protect profitability. Our focus on innovation and quality have helped us support this positive performance.”
Gruma said it incurred $49 million in capital expenditures during the first quarter. During the quarter, the company allocated expenditures to equipment upgrades at its tortilla plant in Dallas; construction of a new tortilla plant in Indiana; capacity expansion at its tortilla plant in Australia; and maintenance and general technology upgrades across the company, particularly at GIMSA.Overall, majority net income at Gruma SAB de CV in the first quarter was $75.9 million, up 24% from $61.2 million a year ago. EBITDA was $210.6 million, up 28% from $164.9 million, while sales rose 25% to $1.59 billion from $1.26 billion.