San Pedro Garza García / MX. (gr) Gruma S.A.B. de C.V. reported Q2/2019 financial results. Highlights:
During the quarter Gruma’s volume, net sales and margins trended strongly upwards as compared to the beginning of the year, driven mostly by Gruma USA. Although price increases to offset some cost pressures have not yet been implemented at large retail tortilla customers, we have been able to improve results through a better sales mix, especially in retail tortilla, volume growth at corn flour and foodservice tortilla, and internal efficiencies. This upward trend is expected to continue on a sequential basis throughout the year.
On a consolidated basis sales volume declined 1 percent resulting from a 3 percent growth at Gruma USA that was offset by a 3 percent decline at Gimsa. As compared to 1Q19, consolidated volume rose 4 percent, driven by Gruma USA.
Net sales rose 2 percent mostly in connection with 4 percent sales growth at Gruma USA and 5 percent at Gimsa. The Mexican Peso (MXN) strength versus the U.S. Dollar (USD) and the strength of USD versus other currencies reduced growth in MXN terms. Sales from non-Mexican operations represented 73 percent of consolidated figures.
Consolidated Ebitda rose 3 percent, and Ebitda margin improved to 16.5 percent from 16.4 percent due to the adoption of International Financial Reporting Standard 16 (IFRS 16), effective January 2019. In 2Q19, the benefit to Ebitda from the adoption of IFRS 16 was MXN 219 million on a consolidated basis. As compared to Q1/2019, Ebitda rose 11 percent, and Ebitda margin improved 100 basis points. Ebitda from non-Mexican operations represented 74 percent of consolidated figures.
Majority net income declined 3 percent to MXN 1,268 million, affected primarily by higher net comprehensive financing cost. As compared to 1Q19, majority net income increased 23 percent due to lower taxes.
Gruma’s debt was USD 1.45 billion, including USD 222 million from the adoption of IFRS 16, and annualized net debt/Ebitda ratio was 1.8 times.
For additional information please read Gruma’s PDF file below (1371 KB):
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