4th Oct 2013 07:06
LONDON (Alliance News) - Tate & Lyle PLC Friday said that it expects its first half operating profit to be lower than last year, as sweetener volumes in both divisions were hit by a soft US beverage sector.
In a trading update for the six months ended September 30, the British-based multinational agribusiness, which manufactures speciality food and bulk ingredients, said that its trading performance in the second quarter was broadly in line with expectations.
It said that for the full year, it expects its speciality food ingredients business to deliver growth in volumes, sales and profits across all regions.
Tate & Lyle also said that it expects a stronger performance from its bulk ingredients business in the second half of the year, with solid demand for liquid sweeteners in North America, and lower corn prices in Europe, more than offsetting the impact of lower sugar prices on isoglucose margins
It said that within its food ingredients business, it saw strong volume growth in emerging markets and Europe in the first half of the year, although this was partially offset by slightly lower volumes in the US.
The company said that it also saw strong demand for its texturant and fibre ingredients, particularly in Asia Pacific and Latin America, although a softer US beverage sector, due to colder weather, held back volume growth across its higher margin speciality sweeteners.
Tate & Lyle said that it expects its half-year operating profit from its speciality food ingredients business, to be broadly in line with the prior year, however it said that its expects its operating profit from its bulk ingredients business to be somewhat lower that the comparative period, driven by lower US bulk liquid sweetener volumes.
It said that during the second quarter it managed to mitigate a majority of the increase costs associated with poor end of season corn quality and resultant lower starch production yields, and the significant decrease in the corn price.
The group said that it expects to deliver another year of profitable growth, although it said that sweetener pricing rounds will influence its performance in the final quarter of the financial year.
Tate & Lyle expects to released its interim results on November 7.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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