Gruma: tortilla maker announces Q3/2009 results

Monterrey / MX. (dj) Mexican corn flour and tortilla maker Gruma S.A.B. de C.V. said in a statement it made a net profit of 45 million MXN in the third quarter, compared with a 1,77 billion MXN loss a year ago brought about by derivatives losses. Gruma recently completed a debt restructuring in which it converted 738,3 million USD in exchange derivative losses into medium- and long-term loans, refinanced a five-year 197 million USD syndicated bank loan, and refinanced a 3,37 billion MXN loan from development bank Bancomext.

The company said its sales in the third quarter rose twelve percent to 12,57 billion MXN on a weaker Peso against the US-Dollar and higher sales volume in Mexico. Total sales volume rose one percent to 1,09 million tons. Operating profit rose 52 percent from the year-ago quarter, while financial costs fell to 646 million MXN from 2,9 billion MXN. Overview / highlights:

• Sales volume increased one percent due mainly to higher sales volume in Gimsa and, to a lesser extent, Molinera de México.
• Net sales increased twelve percent, driven mainly by the effect of the devaluation of the Mexican Peso in Gruma Corporation, and, to a lesser extent, by price increases in Gimsa.
• EBITDA increased 42 percent, and EBITDA margin improved to 9,4 percent from 7,4 percent. Better margins in Gruma Corporation drove the consolidated increase in EBITDA.
• Debt increased 19 percent to 919 million USD in September 2009.

Consolidated Results of Operations – Q3/2009 versus Q3/2008

Sales volume increased one percent to 1’085 thousand metric tons, due to higher sales volume in Gimsa and to a lesser extent Molinera de México.

Net sales increased twelve percent to 12’566 million MXN, driven mainly by the effect of the devaluation of the Mexican Peso in Gruma Corporation and, to a lesser extent, by higher sales in Gimsa. Sales from non-Mexican operations constituted 73 percent of consolidated net sales during the quarter.

Cost of sales as a percentage of net sales improved to 66,2 percent from 69,9 percent driven by Gruma Corporation and Gruma Venezuela. In absolute terms, cost of sales rose six percent, to 8’319 million MXN, due to the effect of the devaluation of the Mexican Peso in Gruma Corporation and higher corn costs and higher sales volume in Gimsa.

Selling, general, and administrative expenses (SG+A), as a percentage of net sales, increased to 27,5 percent from 25,5 percent, driven mainly by Gruma Venezuela and Gimsa. In absolute terms, SG+A rose 21 percent, to 3’457 million MXN, due primarily to the effect of the devaluation of the Mexican Peso in Gruma Corporation and higher expenses in Gruma Venezuela and Gimsa.

Operating income increased 52 percent to 790 million MXN, and operating margin improved to 6,3 percent from 4,6 percent; both results were driven by Gruma Corporation.

Other expense, net, was 25 million MXN, 14 million MXN, higher than in the same period of 2008. Comprehensive financing cost, net, was 646 million MXN versus 2’897 million MXN in Q3/2008. The reduction resulted mainly from the losses on currency derivative instruments in Q3/2008.

Gruma´s share of net income in unconsolidated associated companies (primarily Banorte) totalled 128 million MXN, 28 percent lower than in Q3/2008.

Taxes amounted to 135 million MXN, compared with an income of 549 million MXN, due to positive deferred taxes in connection with the losses on currency derivative instruments in Q3/2008.

Gruma´s total net income was 112 million MXN versus a net loss of 1’663 million MXN in Q3/2008; the difference came mainly from the losses on currency derivative instruments in Q3/2008. Gruma´s majority net income was 45 million MXN, compared with a majority net loss of 1’765 million MXN in the same period of 2008.

Info: «Third Quarter 2009 Results» (PDF, ten pages, 302 KB, complete press release inclusive tables).