Gruma: Announces Results for Q2/2012

Monterrey / MX. (dj) Mexican corn flour and tortilla maker Gruma S.A.B. de C.V. announced its results for the second quarter 2012. Highlights Q2/2012 versus Q2/2011:

  • Sales volume grew five percent, driven mainly by Gruma Corporation, Gimsa and Molinera de México.
  • Net sales rose 21 percent due to price increases across most subsidiaries, the effect of the Peso depreciation on foreign subsidiaries and the aforementioned sales volume growth. Gruma Corporation, Gimsa and Gruma Venezuela made the greatest contribution to the consolidated increase in net sales.
  • Operating income expanded 21 percent, supported by better results in Gruma Corporation and Gruma Venezuela.
  • Ebitda increased 22 percent as a result of improvements mainly in Gruma Corporation and, to lesser extent, Gruma Venezuela.
  • Majority net income grew 331 million MXN to 437 million MXN, driven mainly by higher operating income, in particular in Gruma Corporation and by gains on foreign-exchange-rate hedging related to corn procurement at Gimsa.
  • Debt increased by eleven million USD to 1’039 million USD versus March 2012.

Consolidated Results of Operations – Q2/2012 versus Q2/2011

Sales volume grew five percent to 1’204 thousand metric tons due mostly to increases in Gruma Corporation, Gimsa and Molinera de México.

Net sales rose 21 percent to 16’304 million MXN, driven primarily by (1) price increases across most subsidiaries in connection with higher raw-material prices; (2) the effect of the Peso depreciation on foreign subsidiaries and (3) the aforementioned sales volume growth. Gruma Corporation, Gimsa and Gruma Venezuela made the greatest contribution to the consolidated increase in net sales. Sales from non-Mexican operations constituted 66 percent of consolidated net sales.

Cost of sales as a percentage of net sales increased to 70,3 percent from 69,5 percent, caused principally by higher raw- material costs in Gimsa. In absolute terms, cost of sales rose 22 percent to 11’458 million MXN, as a result of (1) higher raw-material costs; (2) the effect of the Peso depreciation on foreign subsidiaries; and, to a lesser extent, (3) sales volume growth.

Selling, general and administrative expenses (SG+A) as a percentage of net sales improved to 23,8 percent from 24,4 percent, as a result of better absorption especially in Gimsa. In absolute terms, SG+A increased 18 percent, to 3’880 million MXN, due primarily to Gruma Corporation. Partially responsible for the increase was the effect of the Peso depreciation on foreign subsidiaries.

Other income, net, was two million MXN, 22 million MXN more due especially to gains on natural gas hedging at Gimsa.

Operating income increased 21 percent, to 968 million MXN due to Gruma Corporation and, to a lesser extent, Gruma Venezuela and Gimsa. Operating margin was flat at 5,9 percent.

Comprehensive financing income, net, was 69 million MXN versus a cost of 196 million MXN, an improvement of 266 million MXN resulting mainly from gains on foreign-exchange-rate hedging related to corn procurement at Gimsa. Additionally, financial expenses decreased as a result of the better interest rates Gruma achieved after its 2011 debt refinancing.

Income taxes were 432 million MXN, 34 percent higher in connection with higher pre-tax income. The effective tax rate was 41,6 percent.

Majority net income increased to 437 million MXN from 106 million MXN, driven by higher operating profits and gains on foreign-exchange-rate hedging related to corn procurement at Gimsa.

Gruma S.A.B. de C.V. is one of the world´s leading tortilla and corn flour producers. Gruma was founded in 1949 and is engaged primarily in the production, marketing, distribution and sale of tortillas, corn flour and wheat flour. With leading brands in most of its markets, Gruma has operations in the United States, Mexico, Venezuela, Central America, Europe, Asia and Australia and exports to 105 countries worldwide. Gruma is headquartered in Monterrey, Mexico and has approximately 21’000 employees and 99 plants. In 2011, Gruma had net sales of 4,1 billion USD, of which 66 percent came from non-Mexican operations.
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