MONTERREY, MEXICO — Operating income at Gruma USA in the first quarter ended March 31 totaled 1,299 million pesos ($68.4 million), down 8% from 1,412 million pesos in the same period a year ago.

Net sales at Gruma USA increased 3% in the first quarter of fiscal 2019 to 10,259 million pesos ($540 million) from 9,936 million pesos.

“At this point in time, we were trying to negotiate some kind of price increases with our retailer in the U.S.,” Raul Cavazos Morales, chief financial officer, said during an April 25 conference call with analysts. “We were not able to do that, so that is why we are now updating our estimates for the full year …, which means that we are not expecting to have ideally the first half of the year as this is some price increase. What we basically did, we kept the prices at the same level, but we gained original shelf space with our retailers in the dealers.

“And what we’re doing now, we’re launching to the market new products, value-added products, particularly on corn and with flour tortilla. We already launched the whole wheat (in chia and quinoa), the whole wheat honey oat, the whole wheat sprout … as well as mini or street tacos. We already launched street tacos with yellow corn as well as whole wheat carb balance. With all these new products, we are taking advantage in the prices.”

Mr. Cavazos Morales said Gruma does not expect it will need to sacrifice EBITDA margins in order to gain market share or to gain or to move on the top line on sales.

Gruma said operating margin at Gruma USA declined to 12.7% from 14.2% during the first quarter.

Cost of sales as a percentage of net sales improved to 58.1% from 57.5% in the first quarter, Gruma said.

Gruma said it incurred $30 million in capital expenditures during the first quarter. During the quarter, the company allocated expenditures to the United States (in connection with additional production lines at a tortilla plant in Dallas and additional capacity at a tortilla plant in Florida), to Mexico (for a tortilla plant near Puebla), new corn silos at GIMSA and maintenance and general technology upgrades.

Overall, majority net income at Gruma S.A.B. de C.V. in the first quarter was 1,029 million pesos, down 20% from 1,282 million pesos a year ago. EBITDA was 2,871 million pesos, up 7% from 2,692 million pesos, while sales rose 6% to 18,579 million pesos from 17,532 million pesos.