The Pork business and the sale of auto parts boosted Grupo KUO’s revenues in the second quarter of 2021.
From April to June of the current year, the company‘s income reached 14,305 million pesos, an increase of 42% year-on-year.
Above all, the increase is explained by the good performance of the Pork business with a better price level and volume in the domestic market, higher sales of DCT’s, transmissions and components in the Transmissions business, as well as a better displacement of brake lines, engine and powertrain in the Parts business.
The company also had a high dynamism in the businesses of the Chemical sector, highlighting the results of the Polymers business, which registered a higher price in applications for the electronics segment, together with the distribution of chemicals, as well as the Synthetic Rubber business, with a better level of prices and higher sales volume in applications for tires, adhesives and roofing.
All of the above counteracted the lower level of sales in the Herdez Del Fuerte business in the domestic market, given that during the second quarter of 2020 there was strong demand in the main categories, due to the Covid-19 health contingency.
In turn, this was partially offset by higher demand in the sauce category and better performance in the Food Service segment in the United States.
The percentage of exports to total revenues during the quarter was 58%, an increase of 37%, driven by the Transmissions and Synthetic Rubber businesses.
The Pork business is the largest producer of pork in Mexico, with sales in the domestic and export markets mainly to Japan and South Korea, as well as to the United States, Canada, Chile and China; It markets its products under the brands «Kekén» and «Kiniton» (the latter brand only for export markets). Its leadership derives from vertical integration, which includes: genetics, food plants, farm structure, processing plants and marketing through “Maxicarne” stores and other proprietary channels.
During the quarter, the company’s Operating Income registered a strong increase, reaching 1,338 million pesos.
The growth is mainly explained by the higher level of sales in most of the portfolio businesses, highlighting higher export sales in the Transmissions business, as well as a better price and volume level in the Pork, Synthetic Rubber, Polymers and Parts businesses. together with lower costs and expenses, generating greater absorption.
The foregoing offset the costs associated with the fire in the processing plant of the Pork business, as well as the expenses related to the implementation of security measures in all operations, due to the Covid-19 health contingency.