Grupo Lala, the Mexican dairy group, revealed lower first-quarter earnings as the integration of acquisitions and increased input costs offset a surge in sales.
Operating income fell to MXN1.25bn (US$66.8m) in the three months to 31 March, compared to MXN1.55bn in the comparable period of 2015. EBITDA was down 8.7% to MNX1.7bn. Net income was down 36.6% at MXN704m, the company revealed.
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“Input cost and the incorporation of recently acquired businesses continue to pressure EBITDA margins, although actions initiated since the exchange rate volatility of last year, have contributed to two straight quarters of EBITDA growth,” CEO Scot Rank said.
Sales, however, grew 18.3% to MXN14.8bn. “The highlight of the first quarter of 2017 for Grupo Lala was the acceleration of organic sales, which contributed to a total sales increase of 18% versus the first quarter last year,” Rank said.
Sales from ongoing operations contributed by 10.9%, driven by higher volume, an improved sales mix and pricing actions. Inorganic growth from last year acquisitions contributed another 7.4 percentage points of growth.
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