10 September 2024
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Global Industry

Gruma: reports third quarter 2023 results

San Pedro Garza Garcia / MX. (gr) «We are very pleased with Gruma’s performance in Q3-2023; market fundamentals for our business have remained strong in the U.S. and Mexico, with varying growth dynamics in the rest of our subsidiaries. Demand for our products is still quite positive, especially for our «Better for you» product line, combined with the rapid adoption of our products in our other markets of focus. Our key objective has always been to safeguard profitability in the interest of all shareholders, which we accomplished in Q3-2023. Price sensitivity in our corn flour product line in the U.S. and Central America, due to lower grain costs, has impacted growth in that product line while benefiting margins; the same effect took place in our tortilla operation in Europe. The positive market fundamentals we have seen overall and our ability to rapidly execute through innovation in response to changing trends allowed us to deliver Ebitda and Ebitda per ton with a growth of 34 percent. Ebitda margin increased 190 basis points reaching of 16.4 percent,» Mexico’s Gruma S.A.B. de C.V. said in its statement for the third quarter 2023.

Consolidated Results Of Operations Versus Q3-2022

  • Sales volume remained flat in Q3-2023 at 1,093 thousand metric tons, as the positive volume expansion in Mexico and Europe was offset by volume performance in Central America.
  • Net sales increased 18 percent to USD 1.7 billion due to the transfer of incremental costs and expenses to the top line of the income statement. Sales from non-Mexican operations represented 71 percent of consolidated figures.
  • Cost of sales (COGS) increased 16 percent to USD 1.1 billion due to higher raw material costs in all divisions; and higher labor costs. As a percentage of net sales, COGS improved to 63.5 percent from 64.5 percent.
  • Selling, general and administrative expenses (SGA) increased 12 percent to USD 392.3 million due to a rise in commissions paid, in line with higher revenues; and higher logistics costs. As a percentage of net sales, SGA improved to 23.2 percent from 24.4 percent.
  • Other net-expense was USD 6.3 million compared to USD 1.1 million last year. The change resulted mainly from losses on Gruma’s FX hedging positions pertaining to the purchase of corn.
  • Operating income increased by 38 percent to USD 220.2 million. Operating margin expanded 190 basis points to 13.0 percent from 11.1 percent.
  • Ebitda increased 34 percent to USD 278.5 million, and Ebitda margin increased 190 basis points to 16.4 percent from 14.5 percent. Ebitda from non-Mexican operations represented 78 percent of consolidated figures.
  • Net comprehensive financing cost rose by 10 percent to USD 35.7 million, mainly due to higher debt service relative to Q3-2022, reflecting greater net working capital needs and benchmark rate adjustments.
  • Income taxes were USD 69.5 million, a 40 percent increase compared to Q3-2022, due to higher pretax earnings resulting from the dynamics mentioned above. The effective tax rate for the quarter was 37.7 percent compared to 39.2 percent in Q3-2022.
  • Majority net income increased 77 percent to USD 136.2 million.
Gruma continued to deliver solid results in Q3-2023, as profitability was safeguarded despite varying price sensitivities in some of Gruma ́s product lines. Ebitda margin of 16.4 percent was achieved, which represents an Ebitda per ton growth of 34 percent.

For additional information please read the company’s PDF file below (426 KB):

20231023-GRUMA-Q3-2023.


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