Mexican baker Grupo Bimbo has indicated that first-quarter profits almost halved as higher financing costs and margin pressure hit the bottom line. 

Bimbo reported net profit of MXN601m (US$46.3m) in the quarter, down 47% from the previous year. 

Higher interest costs meant that financing expenses rose by MXN268m in the period, while currency exchange shaved MXN73m off the company’s profits. These factors resulted in net margin contraction of 2.4% to 1.5%, the company added. 

Operating profit dropped 24% in the year, declining to MXN1.7bn. Operating margins fell 3.4% to 4.1% in the three month period, Bimbo added. EBITDA fell 7% to MXN2.88bn. 

However, sales increased 39% in the period, boosted by 12% organic growth and the impact of acquisitions, notably the purchase of Sara Lee’s business in the US and Iberia, which raised sales by 27%. 

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