Sales were 7.199 billion pesos ($555.5 million), down 1% from 7.254 billion pesos. Sales volume also was lower, easing 2% to 424,000 tonnes. The lower volume reflected reductions at European operations due to extraordinary sales of corn during the year ago quarter, which more than offset a 3% increase in U.S. operations, Gruma said.
“The increase in the U.S. was driven by the corn flour operations in connection with additional supply to several corn chip manufacturers,” Gruma said.
Operating margins improved to 9.2% from 7.7%, while cost of sales as a percentage of net sales improved to 61.9% from 64.1%.
“Half of the improvement was driven by the U.S. tortilla operations and the other half by the European operations,” the company said. “The improvement at the U.S. tortilla business came mostly from (1) the continued sku (stock-keeping unit) rationalization program combined with a sales mix improvement by focusing on high-margin products (as in the case of wheat tortillas and low-count corn tortilla presentations), and (2) lower raw-material costs while prices were also maintained.
“Europe improved due mostly to lower raw-material and packaging costs while prices were maintained, as well as production efficiencies related mainly to packaging automation and overhead.”
Majority net income of Gruma SAB de CV in the second quarter was 1.135 billion pesos ($87.6 million), up sharply from 226 million pesos in the second quarter of 2013. Net sales were 12.339 billion pesos, down 1% from 12.439 billion pesos in the year earlier period.
Gruma attributed improvements to better operational performance, foreign exchange rate fluctuations, lower interest expenses, lower taxes and the discontinued operations line related to Molinera de Mexico.