MONTERREY, MEXICO — As a company dealing in corn products amid current market conditions, Gruma SAB de CV experienced the benefits of “natural hedging” in the third quarter, Adolfo Fritz, investor relations officer at Gruma, said in an Oct. 20 conference call to discuss third-quarter performance.

Overall, majority net income at Gruma in the third quarter was $77.1 million, up 5% from $73.2 million the previous year. EBITDA was $208 million, up 13.5% from $183.2 million, while sales rose 21% to $1.44 billion from $1.19 billion.

Operating income at Gruma USA in the third quarter totaled $124.7 million, up 15% from $89.2 million in the year-ago quarter. Net sales increased 25% to $826.2 million from $659.3 million. Sales volume was up 4% in the third quarter.

During the conference call, an industry analyst asked how the company had been able to achieve 21% sales growth while maintaining 4% volume growth in the quarter.

Mr. Fritz said the company had been fortunate to avoid some of the effects of price elasticity experienced by other food and beverage companies.

“I would suggest that our product might not feel that elasticity at all just because it’s a product that it’s still on the low-price range of comparables,” Mr. Fritz said. “And it’s — and it caters to markets that are non-price-sensitive .... So I would suggest that’s the reason why we have not seen impacted volumes.

“And if you go to the other spectrum of products to the corn-related products, those products are aimed for Hispanics that consider tortillas and corn flour as a basic product and as part of their meals every day. And they would forgo probably other types of food before they start foregoing buying corn flour or tortillas for their everyday needs.

“So, I would say that we are fortunate enough to cater to markets that allow us to be naturally hedged in these conditions, if you want to use that term, to yield the volumes we’ve been able to have during these times.”

Sales volume increases were driven by a solid performance in both the tortilla and corn flour businesses, the company said. The tortilla business benefited from higher consumption of corn products in light of inflation, in addition to ongoing growth in Gruma’s “better-for-you” product line, including the introduction of new products to that market, the company said. In corn flour, volume growth in the quarter reflected demand from industrial customers due to the higher cost of corn, coupled with the ongoing preference for home cooking.

“In the US, retailers have been, as we’ve said in other calls, very open to the price movements and price adjustments that we’ve had to make

given the inflationary environment that we live in,” Mr. Fritz said. “So far, we’ve been successful at transferring the cost of inflation that’s been pressuring our cost structure. And we’ve been able to maintain that profitability through those increases.”

Mr. Fritz said the company experienced growth of almost 11% in the BFY line relative to last year. Of that, around 30% was attributed to the introduction of the new SKU (Mission Foods Zero Net Carbs tortillas) in the United States.

Operating margin at Gruma USA grew 160 basis points during the third quarter to 15.1% from 13.5%. Cost of sales as a percentage of sales increased to 58.2% from 57.9%, as a result of higher raw material costs, higher labor costs and greater volume, according to the company.