HINTS AND TRENDS (EL ECONOMISTA 7) GRUMA.

The corn processor announced the termination of its provision of market maker services agreement with the UBS brokerage firm for the operation of its shares, ending on September 30^th, 2014. 

STOCK INVESTORS, THE BIG WINNERS OF THE 2008 CRISIS (EL FINANCIERO 4-5)

The subprime mortgages crisis and the collapse of Lehman Brothers caused the share prices of various large companies listed on the stock exchange to fall, in some cases by over 80%, worldwide. Those who kept those shares in a drawer only to open it after years had passed, or those who bought them dirt cheap and waited for time to pass, are now celebrating with astonishing profits... Six years after Lehman filed for bankruptcy, the Mexican companies with the largest increases in share price have been Alfa, at over 840%; Pinfra, at 805%; Gruma, at 515%; Alsea at 353%; AC, at 319%, Grupo Carso, at 277% and Mega, at 271%. Other companies including Ideal, Liverpool and Bolsa also had impressive increases.

HANK ON THE WAY TO BANORTE (REFORMA pp) (REFORMA 6)

In the middle of the imminent departure of Guillermo Ortiz as Chairman of the Board of Directors of Grupo Financiero Banorte, Carlos Hank González will be joining the institution. To do so, the grandson of Roberto González Barrera and son of Carlos Hank Rhon resigned from all of his positions held at Grupo Financiero Interacciones, as reported by the Mexican Stock Exchange... The arrival of Hank González at Banorte will have to be conducted under the rules of corporate governance. In the press release, the director takes it for granted that the GFB assembly will ratify him as a board member and adds that he will defend the rights of all shareholders. Today, more than ever, I am committed to the legacy and vision instilled in me by my grandfather Roberto González Barrera, founder of Gruma and Banorte, the leading Mexican financial group in the country and a symbol of strong, responsible banking in Mexico”...

THE 100 TOP BUSINESS LEADERS IN MEXICO (EXPANSIÓN 174-175)

The 50 leading business leaders directing companies in Mexico’s top 300. In a table that ranks the company’s revenue, its sector and the proportion of the Mexican economy that this activity accounts for, Gruma is ranked 18^th. Since December 2012, Juan Gonzalez Moreno has led the company founded by his father, Roberto González Barrera. When he took up the post, he reset the company’s strategy in an attempt to go back to its roots and improve profitability. With a US $400 million loan from Goldman Sachs, he repurchased 23% of Gruma shares that previously belonged to Archer Daniels Midland. Following a restructure process, including the termination of 2,700 jobs, he has achieved savings of approximately US $35 million and closed 600 non-profitable businesses. As a result, share value has grown 40% so far this year.

AMÉRICA ECONOMÍA EDITORIAL/WORLD-CLASS LATIN AMERICAN FIRMS (AMÉRICA ECONOMÍA 8)

Globalization made local industries that are unable to compete internationally go bankrupt. This has also opened the door to a surge in more innovative and productive Latin American companies, which América Economía has branded as “multi-Latin” firms. In the past decade, however, hundreds of private-sector multi-Latin firms have emerged across all sectors: Colombian Financial groups like Sura, Chilean retail giants such as Cencosud, Falabella and Ripley, diversified food conglomerates such as Mexican firms Gruma and Bimbo, Brazilian company JBS-Friboi, and the Peruvian company Alicorp. And we shouldn’t forget the world’s largest cement manufacturer, Mexican firm Cemex, the first Latin American multinational to achieve global success... 

MEXICAN STOCK EXCHANGE CLOSES WITH 0.18% LOSS (CAPITAL DE MÉXICO 2) (EL NORTE) (THE NEWS 17)

The Mexican Stock Exchange (BMV) closed with a loss of 0.18 percent, 37.33 points down on the previous day, after recovering from a fall of over one percentage point at the start of the day, helped by economic data from the United States and comments from the Federal Reserve concerning the possibility of maintaining bond purchases. Issuers benefitting included HILASAL A series at 5.49% andGruma B series at 3.75%.

HINTS AND TRENDS (EL ECONOMISTA 7) GRUMA.

Arturo Luis Alonzo Padilla, a graduate in Economics from the National Autonomous University of Mexico, has asserted that there are no monopolies in the corn flour market. Maseca, a subsidiary of the company, accounts for 25 percent of the market.

REPORTS:WITH THE STOCK MARKET IN A STALEMATE +, 2014 IS IN THEIR HANDS. (EXCÉLSIOR 18)

This year is already running out of steam. However, with just over two months until it’s over, the remaining time will be crucial to determine the performance of this tortuous year for the Mexican Stock Exchange... The price-to-earnings multiple of the IPC index is currently at its highest ever, estimated to reach 22.81 points this quarter, up from 12.24 units in the third quarter of 2008. This means that, since the financial crisis, the share price of issuers has increased by almost 24 times the value of reported earnings. As a result, each time more money is placed on the market, it must be done at a much higher cost. Market with higher-expectations. The corporate reporting season is underway, but the most eagerly-awaited results will begin to roll in this week. The best earnings per share are expected from Peñoles,Gruma and Asur…

GRUMA’S OPERATING PERFORMANCE ACKNOWLEDGED (EL HORIZONTE ONLINE 0)

Grumahas improved its operating and financial performance due to greater profitability and lower debt, according to Standard & Poor’s ratings agency. As a consequence, the agency has upgraded its outlook forGrumafrom stable to positive following its better-than-expected performance, with a current rating of “BB+”. The report explained that the positive outlook reflects the fact thatGruma’s operating performancewill continue to improve... 

3rd CRÓNICA AWARDS: 2012 PRIZE WINNERS (LA CRÓNICA DE HOY 8)

Third Crónica Awards, Prize Winners in the Values and Social Commitment category: Roberto González Barrera, founder of Grupo Maseca and Grupo Financiero Banorte (1930-2012)…

GRUMA’S NET PROFITS UP 83% OVER THE QUARTER (EL ECONOMISTA 1-16) (EL SOL DE MÉXICO 1-2) (LA JORNADA 33) (EL FINANCIERO 34) (EXCÉLSIOR 4)

World-leading Mexican corn flour and tortilla manufacturer Gruma said on Wednesday that its net profits had increased by 83% over the third quarter of this year as a result of operational efficiencies, fewer taxes and reduced financial costs. Gruma reported that between July and September 2014, it made a net profit of MXN 1.15 billion (approximately US$86 million), compared to the MXN 631 million it made during the same period last year. The company also said that its earnings before interest, tax, depreciation and amortization (EBITDA) were up 15% to MXN 1.93 billion, mainly boosted by the operations of Gruma Corporation USA. Gruma’s net sales totaled MXN 12.67 billion, just 1 percent higher than the figure reported during the same period in 2013. Shares in the company increased by 0.92 percent on the Mexican Stock Exchange on Wednesday to MXN 149.65...

CORPORATIONS (LA CRÓNICA DE HOY 28)

Gruma recorded annual growth of 73 percent in its net profits over the third quarter, boosted by improved operating performance and reduced financial costs. The company recorded earnings of MXN 1.22 billion between July and September this year, compared to the MXN 702 million recorded during the same period in 2013.

IRASEMA ANDRÉS DAGNINI / GOOD ACCOUNTS (LA RAZÓN 26)

Grumais leading the pack. Mexican companyGrumahas again recorded excellent quarterly figures. Between July and September 2013, the company’s net sales increased by 0.8 percent to MXN 12.67 billion, 70 percent of which was earned outside Mexico. Operating profits totaled MXN 1.57 billion for a year-on-year rise of 20.3 percent, with net profits increasing by 73 percent to MXN 1.22 billion, up from MXN 702.5 million during the third quarter of 2013. Over this period,Grumamade capital investments of US$31 million, principally aimed at expanding its manufacturing capacity at its plants in Mexicali (corn flour), Tijuana (Tortillas) and Florida, United States (tortillas).

PRODUCERS DEMAND SUBSIDIES AT FORUM; EXPERTS PROPOSE AGRICULTURE BY CONTRACT (LA JORNADA 46)

While producers continue to demand sales subsidies following the fall in basic grain prices, international consultants are suggesting that this scheme does not work and that alternatives such as agriculture under contract must be sought. The issue of low prices, as well as changes and challenges in food production, has been central to the global agricultural forum organized by the National Farming Council (CNA), with a consensus that the current situation will last for a further two years. In his speech before hundreds of agricultural producers, including directors of Maseca and Minsa and the former Minister of Agriculture Javier Usabiaga, as well as local directors of small and medium-sized growers...

GRUMA ANNOUNCES INCREASED PROFITS.  (EN LOS TIEMPOS DE LA RADIO )

Alfredo Huerta, contributor: Gruma is reporting a 73 percent increase in its net profits.

EXCELLENT RESULTS AT THE CLOSE OF 2014  (MILENIO NEWS (8 a.m. to 12 p.m.)

Samuel Cuervo, presenter:GRUMAannounced its operating results at the close of the second quarter of 2014, showing significant improvements in its profitability, financial structure and value creation. Its sales volume reached 929,000 metric tons, with its net sales totalling MXN 12.67 billion, one percent higher than those reported during the same period of 2013. Over this period, Gruma’s debt fell by US$232 million compared to December 2013...

HUGO GONZÁLEZ/TECHNO COMPANIES (MILENIO DIARIO 34)

Corn tortillas... So that the baby is happy. Impressive results were registered by Gruma at the close of the third quarter of 2014... although its sales were just one percent up on the same period in 2013, the 20 percent increase in the company’s operating profits are highly impressive and mainly come as a result of its positive results in the United States, Asia and Oceania, which have also brought about a 15 percent rise in the cash flow of the Mexican multinational.

POLITICAL & FINANCIAL COLUMNS (EN LOS TIEMPOS DE LA RADIO )

Juan Manuel de Anda: “Financial Split”, by Julio Pilotzi, in the newspaper “Capital de México”. With results showing significant improvements in profitability, financial structure and value creation, Gruma, led by Juan González Moreno, has announced its operating results for the close of the third quarter of 2014, where it recorded one percent growth in its net sales compared to the same period in 2013, achieving earnings of MXN 12.67 billion...

ISSUERS SELL MORE BUT EARN LESS (EXCÉLSIOR 2)

Between July and September of this year, companies listed on the IPC Index of the Mexican Stock Exchange (BMV) increased their sales by 10.33 percent; however, their earnings fell by 31.15 percent... By contrast, Gruma was one of the best performing companies in terms of majority net profit, with increased earnings from MXN 631 million to MXN 1.15 billion as a result of the internal strategies rolled out by the corn-product manufacturer to enhance its profitability.

THE FALL IN THE PRICE OF CORN DRAGS DOWN WHEAT AND GROWERS (LA JORNADA 21) (LA PRENSA 14)

The fall in bulk corn prices has also dragged down wheat prices, which have decreased by approximately MXN 1,500 per metric ton in just one year, which adds to the fall in annual tortilla consumption per capita of around 20 kilograms in recent years from 100 kilos per person to just 80. Even with the fall of corn and wheat prices, the price to the end consumer has remained stable, as tortilla manufacturers have seen the costs of other inputs increase. The grower is the party most affected by this situation, according to statements made in separate interviews by senior managers of Maseca and Minsa, the leading corn flour producers in the country. José Alfonso Cebreros, Director of Maseca and President of the National Chamber of the Corn Industry, indicated that there has been an average fall in tortilla consumption in recent years of around 20 kilograms per person, further stating that there are more tortilla manufacturers but there is less consumption. In an interview held during the Global Agricultural Forum, he mentioned that, given current corn prices, it is important to advance with the seed-sowing program approved for Sinaloa, the state that produces most grain for human consumption...

OPINIONS OF TEN ENTREPRENEURS/WHICH LEG ARE MEXICAN COMPANIES’ LIMPING ON? (FORBES MÉXICO 200-204)

Alejandro Valenzuela, Director General of Grupo Financiero Banorte. 1. The problem is not that Mexican companies succeed abroad, but that there are still few domestic companies with the scale and capacities required to achieve this goal. In fact, Mexico’s leading companies already have an extensive global presence, with well-known names such as Cemex, América Móvil, Gruma, Bimbo and Femsa; however, there are also other lesser-known - but no less successful - companies in the global arena, such as Mexichem. Unfortunately, there are few Mexican companies big enough to embark on an international strategy...

MONTERREY CRANES TO BUILD KIA PLANT (EL NORTE 0)

On October 31, Monterrey company GMVykon will raise the first four structures of what will become the automobile assembly plant of Korean manufacturer KIA Motors in Pesquería, Nuevo Leon. However, other projects the industry has its eye on include billion-dollar investments from Techint, the holding company of Ternium Mexico, in Pesquería for the installation of a thermal power plant, as well as two more Gruma factories in Monterrey and Tijuana.

DOORS OPENED TO THE DISABLED (EL NORTE 0)

Around 90 companies, organizations and universities taking part in the Congruence Movement from Monterrey provide 2,800 equal-opportunities jobs to people with disabilities. This program, which emerged 10 years ago and is led by Cemex and Amrop, also boasts the participation of Pepsico, Arca, Femsa, Gruma, Xignux, Proeza, Amrop, the Monterrey Institute of Technology, Caintra Nuevo Leon, and many other companies.

LEAN QUARTER FOR THE STOCK EXCHANGE. (EL ECONOMISTA 1-10)

Following the end of the financial reporting season for the third quarter of 2014 by companies quoted on the Mexican Stock Exchange (BMV), financial analysts agree that most of the results reported were poor and below expectations... the issuers with a higher EBITDA than expected were: Alpek, América Móvil, Autlán, Grupo México, Gruma, Lenova, Minera Frisco, Ohlmex, OMA, Peñoles, Gentera, Inbursa, Banregio, Banorte and Santander Mexico. The companies with EBITDA in line with expectations were: Arca Continental, Alfa, Alsea, Asur, Bimbo, Chedraui, Kof, Lala, Mega and Walmex.