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July 20, 2017

Tortilla maker Gruma posts higher Q2 profits

Mexico's Gruma remained on track to achieve its long-term targets as the corn flour and tortillas maker posted an increase in second-quarter sales and profits.

By Simon Harvey

Mexico’s Gruma remained on track to achieve its long-term targets as the corn flour and tortillas maker posted an increase in second-quarter sales and profits.

The San Pedro Garza Garcia-based company, which ploughed funds into new and existing plants during the quarter, saw net sales rise 7% to MXN17.4bn (US$990m) from a year earlier, according to its results published yesterday (19 July). Earnings before interest, tax, depreciation and amortization or EBITDA) also climbed 7% to MXN2.8m to represent a margin of 16.3%, which Gruma said was the highest ever.

Capital expenditure dropped to MXN61m from MXN79m, even though the company invested in new tortilla production facilities in the US and Russia, and expanded existing plants in the Netherlands, Malaysia and Australia. 

“Sales volume growth in all subsidiaries, other than Gruma Centroamerica, is providing benefits that arise from economies of scale, which coupled with a better product portfolio and improved operational performance, particularly at Gruma USA and GIMSA, has enabled the company to once again attain a record EBITDA margin level.”

While Gruma’s net income dropped 1.4% to MXN1.48bn for the quarter from a year earlier, majority net income, a measure watched in Mexico, climbed just over 1% to MXN1.43bn. Operating income rose 7% to MXN2.3bn, primarily driven by a better performance at Gruma USA, the company said.

The company’s debt increased to US$806m in the second quarter versus US$704m a year earlier, primarily related to cyclical working capital requirements, dividend payments and Capex, according to the statement. 

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