MONTERREY, MEXICO — Operations of Gruma SAB de CV have demonstrated resilience during the cororonavirus pandemic and benefited from higher sales volume, according to Fitch Ratings. On Aug. 31 Gruma affirmed the BBB long-term foreign and local-currency issuer default rating of Gruma at BBB.

Gruma also affirmed the national long-term rating of Gruma at AAA (mex).

Fitch said the increase in sales of corn flour and tortillas in the retail channel has more than offset decreases in foodservice.

“In addition, while Gruma has incurred additional expenses for the safety of employees and operations, no material pressures in profitability are expected given the increase in revenues from the more profitable retail channel and the higher demand of value-added products,” Fitch said.

More generally, Fitch said Gruma’s rating reflects the company’s strong position as a top miller of corn flour and baker of tortillas globally, benefiting from well-recognized brands and geographically diversified operations. The company has a solid financial profile, good profit margins and modest leverage ample liquidity.

Looking forward, Fitch is projecting strong operating performance for Gruma in the face of the coronavirus pandemic and anticipated economic woes where the company operates. Sales growth of about 14% is projected by Fitch for 2020 with a more modest rate of 4% expected for 2021.

“Gruma’s profitability is expected to improve due to better sales mix in products and channels, favorable cost inputs environment and higher operating leverage that will offset pressures related to sales expenses and safety initiatives,” Fitch said. 

Gruma’s debt to EBITDA is about 1.8 times, a figure that should decline to 1.5 times in fiscal 2021 in the absence of major investments, acquisitions or large shareholder distributions, Fitch said. The agency said its ratings are predicated on long term leverage between 1.5 and 2.0 times EBITDA.