The head of Bimbo in Spain gives its first profit in five years

Bakery Iberian Investments, the head of the Bimbo group in the Iberian Peninsula, achieved its first individual profit in a five-year period in 2019, in which it accumulated large losses that in 2018 reached 351 million.

An absence of profitability that has caused that during that period its Dutch parent had to inject funds constantly, in the form of successive capital increases. Something that also continued in 2019, although at a slower pace.

This is stated in the individual accounts that Bakery Iberian Investments has just deposited in the Mercantile Registry. A significant and habitual delay in this company, which has not yet deposited its consolidated financial report for 2018, nor that of 2019.

The explanation for the individual profit recorded in that year was, on the one hand, the absence of impairments on its assets. In 2018 these amounted to 332 million, causing the large losses of that year. Those impairments focused on its main Spanish companies: 95 million corresponded to Bimbo SA, which brings together the company’s production in Spain; and 87.1 to Bimbo Donuts. It also deteriorated its business in Argentina, among other international subsidiaries.

In 2019, Bakery Iberian Investments was able to avoid these effects. In fact, another factor that explains its benefits is a reversal of the impairment that it applied to a Chinese investee for an amount of 40 million and another of 22 million, precisely, in its Spanish companies. The balance of impairments and reversals was positive in the income statement for 34.7 million.
Receipt of funds

The constant losses incurred by Bakery Iberian Investments over the years led to constant injections of funds by its parent. Between 2014 and 2018, contributions reached a total of 770 million, reaching 170 million in 2017 and 150 in 2018.

In 2019 this amount dropped drastically, to 69.3 million euros, 55% less. In total, it carried out five capital increases: one on March 31, the largest with 24 million euros including the share premium; another on September 16, a third on October 29, followed by a new one two days later, and a last on November 30. All of them subscribed by its Mexican parent, Grupo Bimbo SAB de CV, and by the Dutch, Bimbo Holland BV

During that year, the company’s income was 39.4 million, obtained from the “performance of corporate services.” Among the subsequent events, the company reviews the incidence of Covid-19, although it does not quantify the impact on its business.

It also reflects the purchase of the Grupo Siro business in Paterna for 70.8 million in June 2020, which made Bimbo a supplier to Mercadona; and also the payment made for 10 million as a commitment to purchase the Siro factory in Medina del Campo, in January of this year.

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