Mexican breadmaker Bimbo's Q2 profit drops 16%

MEXICO CITY (Reuters) - Mexican breadmaker Bimbo's second-quarter net profit slipped by 16.3% compared to the same period last year to 3.32 billion pesos ($181.56 million), the firm reported on Wednesday.

The company's revenue fell nearly 2% to 98.09 billion pesos.

WHY IT'S IMPORTANT

Bimbo is Latin America's biggest breadmaker and a top player globally, with revenues last year amounting to some 400 billion pesos ($22.6 billion) and a market value of about $16 billion.

It sells baked goods and snacks across some 35 countries and four continents including popular brands such as El Globo, Tia Rosa and Takis hot chips as well as its name-brand sliced bread.

BY THE NUMBERS

Bimbo's earnings landed slightly below forecasts from analysts polled by LSEG, who had forecast a quarterly net profit of 3.33 billion pesos from net sales of 99.31 billion pesos.

Bimbo had earlier in the year cut its 2024 earnings growth outlook, predicting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the low-single digits.

Quarterly adjusted EBITDA landed at 13.95 billion pesos, nearly flat from the 13.99 billion pesos registered in the same period of 2023.

KEY QUOTE

"We continue to see the benefit of lower raw material costs," said Diego Gaxiola, the company's chief financial officer.

CONTEXT

The firm last year suffered from a dilution in its foreign earnings due to a stronger Mexican peso, but the currency weakened following the country's elections this quarter, ending June down 7% against the U.S. dollar compared to a year earlier.

($1 = 18.2862 Mexican pesos at end-June)

(Reporting by Aida Pelaez-Fernandez; Editing by Jamie Freed)