Mexico’s Bimbo beats Q3 estimates, driven by product price hikes

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Loaves of bread of Mexican breadmaker Grupo Bimbo are pictured at a convenience store in Monterrey

MEXICO CITY (Reuters) -Mexico’s Grupo Bimbo on Thursday posted a 51% year-on-year jump in its third quarter net profit, beating estimates, boosted by strong sales and product price increases to tackle rising inflation.

Grupo Bimbo’s earnings stood at 6.06 billion pesos ($301 million) in the July to September period, the company said in a statement, well above the 4.1 billion pesos anticipated by analysts, according to Refinitiv.

Revenues for the company, which operates some 100 brands, climbed 20% to 102.8 billion pesos, just above the 101.3 billion forecast by analysts, driven by a hike in sales, mainly in Latin America.

The company increased prices in Europe, Asia and Africa, and said it also adjusted prices in the rest of the regions it operates in.

“We reached record levels and our volumes continued to grow despite price increases,” Bimbo’s Chief Executive Daniel Servitje said in a statement.

The firm’s earnings per share stood at 1.37 pesos, beating the Refinitiv estimate of 1.02 pesos.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged 15.2%, while margins contracted 60 basis points, mainly due to higher commodity costs and rising inflation.

“The inflationary environment has been very challenging. However, we have been able to navigate it thanks to the resilience of our categories and the high demand for them,” Servitje added.

($1 = 20.1271 pesos by end-September)

(Reporting by Valentine Hilaire, Editing by Isabel Woodford and Richard Pullin)

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