Grupo Bimbo saw its third-quarter earnings tumble 82% after it incurred a jump in pension costs and charges from the integration of the Sara Lee business the bakery giant acquired in North America.
The Mexican company reported net income of MXN369m (US$28.3m) for the first three months of 2012, compared to MXN2.1bn a year earlier. Operating income fell 56.1% to MXN1.35bn.
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Bimbo incurred MXN1.04bn in charges in the US from the withdrawal from of two pension plans. It cited MXN372m in integration costs in the US after the Sara Lee deal last Novemeber. The company also ran up MXN81m in labour costs in Venezuela after changes to local labour laws.
Bimbo said the pension decision had generated an “economic benefit” to the company of MXN887m and gave it more “visiibility” into its future pension costs.
The company, meanwhile, reported a 34.7% increase in net sales to MXN43.45bn thanks in part to the contribution from the former Sara Lee operations.
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By GlobalData
