Grupo Bimbo profit plunges

Grupo Bimbo - the world's largest bakery - has reported a sharp dip in third-quarter profits as higher wheat prices and costs from the integration of its North American Sara Lee business hit the firm’s margins.

Profit fell 82% to $28.4 million as Grupo Bimbo heads towards its fourth consecutive decline in annual earnings. The firm blamed rising wheat prices resulting from the worst drought to hit the US for 50 years and the higher cost structure of its Sara Lee North American business, which was acquired for $675 million last year. 

Grupo Bimbo is set to post a decline in profit of around 8.3% to 4.89 billion pesos, according to a poll of analysts by Bloomberg. 

However, sales were up 35% to 43.4 billion pesos, led by gains in Mexico (+8%) and Central America (+20%). The firm also reported a 65% increase in US bread sales.