Gruma USA has significant growth in sales.
Gruma USA saw excellent sales volumes in the US during the first quarter of fiscal 2022, driven by the company’s “better-for-you” product demand and record-breaking maize flour operations.
Gruma USA’s operating income for the first quarter ending March 31 was $83.3 million, a 4% decrease from $86.5 million during the same period the previous year. While sales volume increased 5%, net sales increased 17% to $724.6 million from $618.9 million.
Adolfo Fritz, the investor relations officer at Gruma, stated on a conference call with analysts on April 21 that “both tortillas and corn flour had a solid first quarter of the year from a divisional performance basis in the US division.” “The retail tortilla market continued its excellent growth trajectory, expanding by 1.2% due to the positive demand from ‘better-for-you’ tortillas, particularly the Carb Balance and gluten-free product lines. In the meantime, foodservice has not only returned to pre-pandemic levels since the fourth quarter of 2021, but it has also seen robust demand, as shown by an 8% increase in volume over the previous year.
“Overall, our US tortilla operation’s volume increased by 2% throughout the quarter. And in 2020, when the pandemic’s effects support robust volume sales, our corn flour operations (had) a volume gain of 9%, with results nearing historical record levels in the US. In addition to healthy volume growth from our retail clients, we saw significant demand from institutional clients as home cooking has begun to supplant dining out since the pandemic, and this need has only increased with inflation levels at the beginning of 2022. These robust volumes and the price increases from the previous year increased sales by 17%, establishing a solid baseline for further results.
According to Mr. Fritz, Gruma has “substantial” brand recognition in the US, which puts it in a far stronger position than its rivals to withstand price rises.
He remarked, “I think we feel very comfortable in that regard.” “And our rivals are in the same situation, handling their own problems in accordance with their own budgets.”
According to Gruma, the operating margin at Gruma USA decreased by 250 basis points from 14% to 11.5% in the first quarter. As a result of significant cost increases over the first quarter of fiscal 2021, the cost of sales as a proportion of net sales increased to 60.1% from 56.5%, according to Gruma.
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Gruma said that its capital expenditures for the first quarter totaled $63 million. The company’s spending during the quarter went toward building and expanding the capacity of a new tortilla plant in Indiana; buying land for a corn milling plant in Madera, California, to treat wastewater; upgrading the transportation equipment at its tortilla plants in Mexico; improving its Omaha, Nebraska, plant; expanding the capacity of its Australia-based tortilla plant; and performing general maintenance and technological upgrades throughout the entire organization, especially at GIMSA.
Gruma SAB de CV’s majority net income for the first quarter of 2018 was $61.2 million, a 5% decrease from $64.3 million in the same period the previous year. Sales increased 17% to $1.26 billion from $1.08 billion, but EBITDA decreased 2% to 164.9 million.