Gruma: Operating income increased 13% in Q1/2011

Monterrey / MX. (dj) Mexican corn flour and tortilla maker Gruma S.A.B. de C.V. announced its financial results for the first quarter 2011. Overview: Sales volume increased five percent due to higher volumes in all subsidiaries, especially in Gruma Corporation and Gruma Venezuela. Net sales rose seven percent driven by increases across all subsidiaries, in particular Gruma Venezuela, Gimsa and Gruma Corporation. Ebitda grew seven percent due principally to Gimsa and Ebitda margin was flat at 8,8 percent. Majority net income increased significantly to 4’093 million MXN from 257 million MXN as a result of the gain on the sale of Gruma´s stake in GFNorte during February 2011. Debt decreased by 706 million USD or 47 percent, as of March 2011 versus December 2010 and by 882 million USD or 53 percent, versus March 2010.

Consolidated Results of Operations (Q1/2011 versus Q1/2010)

Sales volume increased five percent to 1’150 thousand tons due to higher volumes in all subsidiaries, especially in Gruma Corporation and Gruma Venezuela.

Net sales rose seven percent to 11’921 million MXN, driven by increases across all subsidiaries, in particular Gruma Venezuela, Gimsa and Gruma Corporation. Sales from non-Mexican operations constituted 64 percent of consolidated net sales.

Cost of sales as a percentage of net sales grew to 68,4 percent from 67,4 percent, occasioned largely by Gruma Corporation and Gruma Venezuela. In absolute terms, cost of sales rose eight percent to 8’158 million MXN because of the described sales volume growth and higher raw-material costs.

Selling, general and administrative expenses (SG+A) as a percentage of net sales improved to 25,9 percent from 26,9 percent; coming from better absorption at all subsidiaries and most importantly from Gruma Corporation, Gruma Venezuela and Gimsa. In absolute terms, SG+A increased three percent to 3’084 million MXN, due primarily to Gruma Venezuela and Gruma Corporation.

Other expense, net, was one million MXN, 27 million MXN less due particularly to lower expenses related to the negotiation process of the expropriation of our operations in Venezuela.

Operating income increased 13 percent to 678 million MXN and operating margin improved to 5,7 percent from 5,4 percent.

Comprehensive financing cost, net, was 143 million MXN versus 176 million MXN; a decrease of 34 million MXN, resulting mainly from lower net financial expenses. Gruma´s share of net income in unconsolidated associated companies (primarily Banorte) totalled 4’709 million MXN, 4’582 million MXN more due to the gain on the sale of Gruma´s stake in GFNorte during February 2011.

Taxes amounted to 1’051 million MXN, 835 million MXN more in connection with non-cash taxes related to the gain on the sale of Gruma´s stake in GFNorte during February 2011.

Gruma´s total net income was 4’194 million MXN, versus a net income of 333 million MXN. Gruma´s majority net income was 4’093 million MXN, compared with majority net income of 257 million MXN. The improvement resulted from higher operating income and from the gain on the sale of Gruma´s stake in GFNorte during February 2011.

Info: The complete news release «First Quarter 2011 Results»
(PDF; eight pages; 291 KB) is available on Gruma´s web server.
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