Tate & Lyle first-half profit rises 14%
LONDON — Adjusted operating profit in the fiscal year’s first half for Tate & Lyle P.L.C. increased 14% as reported and 19% in constant currency due in part to a strong performance in its Specialty Food Ingredients, which included a 17% gain in Splenda sucralose volumes. Adjusted operating profit of £194 million ($311 million) for the six months ended Sept. 30 compared with £170 million for the same time period of the previous year. Six-month sales rose 19% to £1,540 million ($2,466 million) from £1,348 million.
“Tate & Lyle delivered an encouraging performance during the first half with solid demand in a number of our markets,” said Javed Ahmed, chief executive of Tate & Lyle, when first-half results were reported Nov. 3. “In Specialty Food Ingredients, we delivered good profit growth driven by increased sales volumes across the product portfolio and stable operating margins.
“Within Bulk Ingredients, we experienced firm demand for corn sugars in the U.S. and Mexico and improved industrial starch margins, particularly in Europe. During the first half we experienced exceptionally strong co-product returns as a result of tight market conditions.”
Within Specialty Food Ingredients, adjusted operating profit of £116 million for the six months ended Sept. 30 was up 7%, 11% in constant currency, from £108 million in the same time period of the previous year. Six-month sales increased 9%, 12% in constant currency, to £450 million from £414 million. Rising demand for packaged foods in emerging markets and a continuation of the high levels of demand and innovation within the snacks segment, particularly in Europe, drove sales volume increases for modified food starches.
Global sugar prices remained high during the first half, which led to an increased demand for specialty corn sweeteners, including Splenda sucralose. Tate & Lyle is restarting production of Splenda sucralose at a facility in McIntosh, Ala. The company expects a cost of £3 million for restarting the facility and the associated reduction in profits for the current financial year.
Within Bulk Ingredients, adjusted operating profit for the six months ended Sept. 30 was £96 million, up 13%, 17% in constant currency, from £85 million in the same time period of the previous year. Six-month sales rose 17%, 22% in constant currency, to £1,090 million from £934 million.
In its outlook for the fiscal year, Tate & Lyle said it expects to deliver good profit growth for the full year within Specialty Food Ingredients driven by higher volumes and sales growth across all product categories. The company expects profits to be weighted toward the first half because of Splenda sucralose volumes reverting to more normal levels in the second half and costs associated with restarting the McIntosh facility in the second half. Within Bulk Ingredients, Tate & Lyle expects the firm demand for corn sugars in the United States and Mexico to continue.