Grupo Bimbo income rises 9% in third quarter

by Eric Schroeder
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MEXICO CITY — Net majority income of Grupo Bimbo S.A.B. de C.V. in the third quarter ended Sept. 30 was NP1,365 million ($99 million), up 9% from NP1,252 million in the third quarter of fiscal 2007. Sales rose 12% to NP20,567 million ($1,506 million) from NP18,353 million, reflecting higher average prices and a better product mix across all operations.

All three divisions of Grupo Bimbo — Mexico, the United States and Latin America — posted year-over-year gains in operating profit and sales during the third quarter.

Operating profit in the United States was NP63 million ($4.6 million), up 34% from NP47 million a year ago. Sales rose 4% to NP4,234 million ($309 million). For the nine months ended Sept. 30, operating profit in the United States was NP44 million ($3 million), down sharply from NP197 million in fiscal 2007. Sales totaled NP12,856 million ($948.6 million), up from NP12,340 million.

"Performance in the quarter benefited from several pricing actions taken over the past 12 months," Grupo Bimbo said. "The Oroweat, Thomas’ and Mrs Baird’s brands grew most significantly while the Hispanic brands outperformed on a volume basis. Sales growth for the first nine months was driven by higher average prices, greater penetration of Hispanic brands, and growth among national retailers."

Pacing the growth at Grupo Bimbo was the Latin America division, which posted operating profit of NP103 million ($7.5 million) during the quarter, up 21% from the same period a year ago. Net sales rose to NP2,698 million from NP2,031 million.

Grupo Bimbo said the gains were driven by integration of new operations, volume growth, higher average product prices and new product launches.

In Mexico, operating profit rose 9% to NP1,940 million ($142 million) behind an 11% gain in sales to NP14,076 million ($1,034 million). Grupo Bimbo said the cookie, salty snacks, dry goods, tortilla and tostada categories registered the largest sales growth during the quarter, while the convenience store channel remained the fastest growing in the period.

Grupo Bimbo said input costs for the company’s key raw materials continued to put pressure on gross margin, which declined by 2.3 percentage points year-over-year to 51.7%.

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