EM LATAM CREDIT: Mexico's Gruma SAB (GRUMAB; NR /BBBpos /BBB+) 1Q Earnings
"Gruma 1Q Net Income $125.9M Vs. $111.0M Y/y" - BBG
Neutral for spreads
• Mexican tortilla and corn flour maker Gruma reported acceptable earnings with sales down 6% YoY but thanks to margin expansion EBITDA was up 4%.
• Sales were generally weaker across all regions. Non-Mexico operations accounted for 75% of sales and 83% of EBITDA. Cost efficiencies in the US were an important driver of EBITDA improvement.
• Debt grew 7% while net debt/EBITDA held steady sequentially at 1.2x.
• Spreads of GRUMAB 10- and 30-year bonds issued in December 2024 have been relatively stable with the 10 year last quoted T+128, 9 bps wider MTD while the 30 year was last quoted T+154bps, 7 bps wider MTD.
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