Milling & Baking News - May 8, 2018 - 15

Financial Results

and starches, as well as solid results from
joint ventures in North America. Wheat
Milling was up from stronger margins, but
bioproducts were down in a pressured ethanol industry margin environment.
"We expect Carbohydrate Solutions to
continue to be impacted by weak ethanol
margins, leading to results in the second
quarter that will be lower than the equivalent period last year," Mr. Luciano said.

Gruma USA operating
income climbs 10% in
quarter; sales rise 3%
income at Gruma USA in the first quarter
ended March 31 totaled 1,340 million pesos ($71.6 million), up 10% from 1,217 million pesos in the same period a year ago.
Net sales at Gruma USA increased 3%
in the first quarter of fiscal 2018 to 9,434
million pesos ($504 million) from 9,162
million pesos.
"The tortilla business grew 1% driven by the retail channel, where volume
benefited primarily from growth at core
products such as Super Soft flour tortillas; specialty products such as Street
Taco tortillas (a small tortilla especially
used for tacos); low-count corn tortillas;
and healthier alternatives (Carb Balance,
and gluten-free in
particular)," the company said. "On the
other hand, the food
service channel was
impacted by the company's decision to reduce supply of some
s.k.u.s (stock-keeping
units) based on profitability. Corn flour sales volume rose 1%
driven mostly by the retail channel in
connection with expanded distribution at
club formats, coupled with increased displays and promotions granted by large
Gruma said operating margin at Gruma USA improved to 14.2% from 13.3%
during the first quarter.
Gruma said it incurred $33 million
in capital expenditures during the first
quarter with expenditures allocated in the
United States in connection with a new tortilla plant in Dallas and the expansion of
a tortilla plant in Florida.
Overall, majority net income at Gruma
S.A.B. de C.V. in the first quarter was 1,282
million pesos, unchanged from the same
period a year ago. EBITDA was 2,692 million pesos, down from 2,697 million pesos, while sales fell 1% to 17,532 million
pesos from 17,677 million pesos. MBN /

"As the rest of the year unfolds, we're expecting Starches and Sweeteners to continue to see good demand in an environment of tight industry utilization."
In the Nutrition segment, profit of $96
million was up 25% from $77 million in
the previous year's first quarter. Wild had
another quarter of double-digit profit increase versus the prior-year period, offset
by some weakness in Specialty Ingredients.

Animal Nutrition was up significantly
over the previous year's first quarter
with strong trade sales and a good product mix with strong margins.
"In Nutrition, we expect continuous
sales growth to help deliver improved
performance in the second quarter," Mr.
Luciano said. "From a seasonal perspective, the second quarter should be the
strongest quarter of the year." MBN




Milling & Baking News

May 8, 2018 / 15

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