2nd Oct 2006 07:00
Tate & Lyle PLC Trading Update In line with its regular practice, Tate & Lyle issues the following tradingupdate on entering a closed period in respect of the interim results to 30September 2006. The interim results will be announced on Wednesday, 1 November2006. Please note this is a change of date from that previously advised. Overall trading since the update issued at the Annual General Meeting on 19 July2006, and reaffirmed at our Value Added seminar on 7 September 2006, hascontinued to be in line with our expectations. We have started the yearstrongly. Over the five months to 31 August 2006, Group profit before tax andamortisation has comfortably exceeded the corresponding period of the prioryear, before the benefit of lower depreciation as a result of the assetimpairment in Ingredients Europe in the year to March 2006. Food & Industrial Ingredients, Americas has demonstrated a strong performanceacross most categories. Value added food and industrial ingredients, commoditysweeteners and ethanol all achieved both volume and margin gains. Our UKfermentation business has been adversely affected by changes to the EU sugarregime, which have increased substrate costs for both our citric acid andAstaxanthin facilities. As expected, small start-up losses have been incurred atthe Bio-PDO(TM) joint venture in Loudon, Tennessee where plant commissioning isunderway. The resolution of the trade dispute on sweeteners with Mexico, whichwill lead to free trade for US high fructose corn syrup into Mexico from 1January 2008, is good for industry fundamentals as we approach the sweetenerpricing round for calendar 2007. Our intention in those negotiations is toimprove margins again. Food & Industrial Ingredients, Europe has performed in line with ourexpectations and trading profits are modestly below the corresponding period ofthe prior year. However, this has been more than offset by the benefit fromlower depreciation as a result of the impairment charge taken in the year to 31March 2006 (which will reduce the depreciation charge by £25 million in the yearto March 2007). Higher prices for both main products and co-products were offsetby the impact of higher cereal prices and energy costs. Good growth was achievedin value added food and industrial ingredients. As advised in the preliminaryannouncement of results on 25 May 2006, trading profits in the second half-yearof the financial year ending March 2007 are expected to be significantly lowerthan in the corresponding period of the prior year. The doubling of SPLENDA£ Sucralose capacity in Alabama is now mechanicallycomplete and production ramp up is currently underway. In Singapore,construction of the new facility is on schedule for mechanical completion inJanuary 2007. We continue to expect sales for the year to 31 March 2007 toremain strong, with growth weighted to the second half. Our market approachcontinues to broaden as we develop SPLENDA£ Sucralose sales. In Sugars, Europe, as expected, profitability in our EU sugar refining businesshas been affected by lower domestic sales prices. This profit reduction has beenpartially offset by another good performance in sugar trading. In Sugars, Americas, the mark-to-market gains seen last year in Canada havereversed and the performance of the division is below the corresponding periodof the prior year. Reported results will reflect changes in exchange rates, particularly the USdollar where the period average rate for the six months to 30 September 2006 wasUS[1.85] compared to the US$1.79 reported for the year ended 31 March 2006. Overall, we have started the year strongly and our expectations for the fullfinancial year to 31 March 2007 remain unchanged. We continue to view the futurewith confidence and remain committed to our target for the profit contributionfrom total value added products to increase by 30% in the year to March 2007. A conference call for analysts and investors will be held at 9.30 am today. Thecall will be hosted by Iain Ferguson, Chief Executive, John Nicholas, GroupFinance Director and Mark Robinson, Director of Investor Relations. Participantsare requested to dial in at least 5 minutes before the commencement of the call.Dial in details are: \* TParticipant dial in number: +44(0)20 7138 0836Replay telephone number: +44(0)20 7784 1024Replay passcode: 4343705#\* T The replay of this call will be available for 7 days until 9 October 2006. \* TCONTACTSMark Robinson, Director of Investor RelationsTel: 020 7626 6525 or Mobile: 07793 515861 Ferne Hudson, Head of Media and Public RelationsTel: 020 7626 6525\* T About Tate & Lyle: Tate & Lyle is a world leading manufacturer of renewable foodand industrial ingredients. It uses innovative technology to transform corn,wheat and sugar into value-added ingredients for customers in the food,beverage, pharmaceutical, cosmetic, paper, packaging and building industries.The Company is a leader in cereal sweeteners and starches, sugar refining, valueadded food and industrial ingredients, and citric acid. Tate & Lyle is the worldnumber-one in industrial starches and is the sole manufacturer of SPLENDA£Sucralose. Headquartered in London, Tate & Lyle is listed on the London Stock Exchangeunder the symbol TATE.L. In the US its ADRs trade under TATYY. The Companyoperates more than 65 production facilities in 29 countries, throughout Europe,the Americas and South East Asia. It employs 7,000 people in its subsidiarieswith a further 4,800 employed in joint ventures. Sales in the year to 31 March2006 totalled £3.7 billion. Additional information can be found on this websitewww.tateandlyle.com. 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