The world's largest bread makers, Mexico's Grupo Bimbo, has announced a staggering 622% increase in fourth-quarter profit due to increased revenue and lower tax rates.
The company reported a profit of 1.28 billion pesos ($97.5 million) in the three months to end-December, compared with 176.75 million pesos in the same period in 2012.
In the fourth quarter of 2012, the Tia Rosa tortilla-maker reported an 81% drop in profit because of a sharp rise in taxes.
For the full financial 2013 year, the Group also said that they managed to double net profit.
Net income for 2013 rose to 4.8 billion pesos ($360.5 million), from 2.02 billion pesos in 2012.
Earlier this month, Bimbo agreed to acquire Maple Leaf Foods Inc.’s Canadian baked-goods business for about $1.66 billion. Analysts have voiced concerns about the high level of debt been taken on by the Mexican group, after having spent around $3.4 billion to buy at least four companies since 2009.
Yesterday, Bimbo announced the closure of five US baking plants over the next six months. “We expect some others (closings) to be announced during the year,” said Daniel Servitje, chairman and chief executive officer of Grupo Bimbo.
Asked whether 2014 would end the wave of plant closings for the company, Fred Penny, president of Bimbo Bakeries USA, said probably not but suggested the pace would be slower in the years to come.
“I think on the major restructuring of our manufacturing footprint we’ll be certainly much further along, closer to having completed the major elements of the restructuring as we exit 2014,” he said. “But I’d also say that we're going to continue to evaluate ongoing investments that are going to take our costs down further. And so I certainly wouldn’t rule out additional work beyond that, but not of the magnitude that we've had the last couple of years.”
© 2014 - European Supermarket Magazine by Enda Dowling
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