Grupo Gloria is a leading company in the Peruvian dairy market, founded in 1941. It is also the most valuable and most remembered Peruvian brand in Peru. It presented its quarterly results for the third quarter of 2021.
Net sales decreased from S/. 976.9 million to S/. 915.7 million, as a result of lower demand for evaporated milk, yogurt, and social program products. This decrease represented a decrease of 6.3% compared to the same quarter of the previous year.
Likewise, cost of sales decreased 1.9% due to lower sales. This resulted in a gross margin of 17.8%, lower than the 21.4% obtained in the same quarter of the previous year due to higher raw material costs.
Selling and distribution expenses increased to 7.2% of sales, compared to 5.7% in the same quarter of the previous year. "The increase is mainly due to higher expenses for sales commissions and marketing expenses, miscellaneous management charges and provisions, net of lower expenses for third party services and taxes."
The liquidity ratio and acid test were 1.59 and 0.80, representing an increase of 0.19 in both cases compared to the same quarter of the previous year.
Likewise, the profitability index increased from 6.74% to 7.33% compared to the third quarter of 2020.
The company's net income increased by S/. 1.3 million, from S/. 65.8 million to S/. 67.1 million, representing an increase of 1.9% compared to the same quarter of the previous year.
The company assured that "Leche Gloria S.A. is the leader in the dairy industry in the domestic market, with coverage in all regions."
Although the Company is moving in a favorable direction, Peruvian livestock producers are in crisis due to the high costs of the inputs they use for milk production and other factors, such as the concentration of companies. The Gloria Group has a dominant position in the market, which makes it difficult to negotiate better prices for the sale of its dairy products. Therefore, it is likely that the increase in raw material prices will continue to rise for the Group.
On capital expenditures, the Company reported, "As of December 31, 2020, the balance of work in progress was S/ 9.5 million for projects that were not completed, assets that were in the process of construction or installation, accruing the respective costs until such time as they are ready to go into operation. At the end of the third quarter of 2021 there are works in progress for S/ 15.7 million, in machinery, equipment, improvements, and expansions."
