MONTERREY, MEXICO — Operating income at Gruma USA in the second quarter ended June 30 totaled 2.14 billion pesos ($95.38 million), up 14% from 1.88 billion pesos in the same period a year ago.
Net sales at Gruma USA increased 14% in the second quarter of fiscal 2020 to 14.54 billion pesos ($647.19 million) from 12.73 billion.
“Gruma USA sales volume rose 5%, while corn flour grew 5%; and tortilla, 6%,” Raul Cavazos Morales, chief financial officer, said during a July 23 conference call. “Net sales increased 14% on the back of volume growth and higher average prices, especially at our tortilla operations due to our better sales mix within the retail business and the change between channels favoring retail channel than foodservice. EBITDA rose 15%, and EBITDA margin improved 20 basis points to 19.3%.”
Specifically, Mr. Morales said Gruma is benefiting from consumers’ demand for value-added tortillas. He said that July sales of super soft tortillas are up about 32%, Carb Balance up about 60% to 76%, and gluten-free up 47%.
“All of these are in the category of better-for-you,” he said. “We are growing with a very good rate. In all the supermarkets, all the sales are growing also a lot. We are increasing our products very well, but particularly in these value-added products. Actually, also in our production facilities, we are now focusing on these kinds of products, which will add value for us.”
Gruma said operating margin at Gruma USA was flat at 14.7% during the second quarter.
Cost of sales as a percentage of net sales improved to 55.9% from 57.2%. Gruma said the increase reflected the better sales mix at the tortilla business and better absorption, which more than offset a variety of cost pressures, coupled with supplies and sanitization activities for COVID-19 and bonus compensation granted to production workers.
Gruma said it incurred $28 million in capital expenditures during the second quarter of fiscal 2020. During the quarter, the company allocated expenditures to capacity expansion for wheat flour and corn flour tortilla at a plant in Dallas, additional snack production capacity at a tortilla plant in Monterrey, Mexico, expansion of a tortilla plant in Spain, additional wheat flour tortilla capacity in the United Kingdom, water treatment system at the corn flour plant in Evansville, Ind., and maintenance and general technology upgrades, especially at GIMSA.
Overall, majority net income at Gruma SAB de CV in the second quarter was 1.75 billion pesos, up 38% from 1.27 billion a year ago. EBITDA was 4.02 billion pesos, up 27% from 3.18 billion pesos, while sales rose 25% to 24.15 billion pesos from 19.31 billion pesos. MBN