The third largest bread maker in the world, Grupo Bimbo, unveiled a disappointed Q2 earlier this week, which revealed sharp 16.8% drop in profits to 683m pesos (US$70.2m), year on year, despite strong sales figures.

Net profit was posted at 150m pesos, down over 60% year on year.

The Mexico City-based firm explained that the profit figures, which were 30% lower than analysts' expectations, were due to the "extraordinary expenses that resulted from the intense restructuring process" in its domestic operations. This overhaul included implementing new software.

Bimbo insisted however that while painful, the investment would lay foundations for future growth.

Q2 revenues were meanwhile up a better-than-expected 23.9% year on year to reach 10.433bn pesos, driven by the US$610m acquisition of the US baking unit of Canada's George Weston Ltd. Mexican sales increased by 9%, more than expected, but volumes dropped 32% and 8% in Argentina and Venezuela, respectively.

German investment bank Deutsche Bank said yesterday [Thursday] that it has lowered its recommendation on Bimbo's stock to "underperform" from "market perform" as a result of the Q2 results.