GRUMA income up 58%

by World Grain Staff
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SAN PEDRO GARZA GARCIA, MEXICO — GRUMA reported on April 22 that majority net income for the first quarter was up 58% to 983 million pesos ($64 million) from 622 million pesos in the same quarter a year earlier.

Improvements in most of the company’s subsidiaries, in particular Gruma Corp. and Gruma Asia-Oceania, pushed results higher. The favorable peso depreciation effect on U.S. operations also contributed to results.

Sales volume increased 4% to 926,000 tonnes, mostly due to results from GIMSA and Gruma Corp. Net sales increased 12% to 13.522 billion pesos, driven principally by the favorable peso depreciation effect, benefiting sales from the U.S. operations when stated in peso terms, and the sales volume growth.

Operating income grew 19% to 1.615 billion pesos, driven mainly by the U.S. operations and, to a lesser extent, better performance at Gruma Asia-Oceania, and by the positive effect of the peso depreciation. Operating margin rose to 11.9% from 11.2% led primarily by the U.S. operations.

Sales volume for Gruma Corp. increased 4% to 425,000 tonnes. The volume increase was driven by the U.S. operations. Corn flour grew by gaining share within customers that produce tortillas, driven by the better quality of Gruma’s corn flour in comparison to other brands, and increased consumption in restaurants.

The U.S. tortilla operations rose due to the retail segment, resulting from increased distribution, shelf space gains, product assortment optimization, and the increasing popularity of some of the company’s tortillas, whose improved formula continues to be well accepted by consumers; and the foodservice segment, resulting from organic growth and the expansion of some Mexican food restaurant chains, the introduction of dishes made with tortillas by several restaurant chains, and new customers among foodservice distributors.

Net sales grew 3% to 8.402 billion pesos. Net sales grew at a lower rate than sales volume principally because of price reductions at the U.S. corn flour operations, effective last October.

GIMSA sales volume increased 5% to 450,000 tonnes, mainly due to higher sales to tortilla makers driven by commercial initiatives; higher intercompany sales to the U.S. operations to support its growth; higher sales to large corn chip manufactures in line with the growth and recovery of some of these type of clients; and higher sales to government channels.

Net sales increased 5% to 3.835 billion pesos, driven by the aforementioned sales volume growth. GIMSA’s revenues reflect 78 million pesos in extraordinary corn sales to Gruma Centroamérica, practically offsetting the lower average prices on GIMSA’s corn flour, which declined approximately 2% versus last year.

Gruma Centroamérica sales volume increased 5% to 50,000 tonnes due to higher corn flour sales in connection with recently launched retail presentations, and more aggressive promotion of the company’s flanker brand in Honduras; higher sales to government channels, institutional clients and snack producers in Guatemala; and high market prices for corn.

Net sales increased 16% to 944 million pesos due mainly to the peso depreciation effect and the volume growth.



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