Tate & Lyle sees positive first-half results
September 28, 2009
by Bakingbusiness Staff
LONDON — First-half results were ahead of expectations at Tate & Lyle, P.L.C., and demand from food and beverage customers remains resilient in the Food & Industrial Ingredients, Americas division, the London-based company said in a Sept. 25 trading update. Full results are expected to be released on Nov. 6.
"Our half-year results will not reach the level of the corresponding period, which benefited from strong co-product revenues during the commodity price peak of summer 2008," said Iain Ferguson, chief executive officer. "As expected, demand from food and beverage customers has proved resilient and we have continued to experience challenging conditions in E.U. sugar and industrial ingredients. Against this backdrop, we have continued to take the actions necessary to strengthen the group’s balance sheet, reduce our costs and ensure that we are well positioned as markets improve."
Within the Food & Industrial Ingredients, Americas division, the company said profits are expected to be below the level of the comparative period due to lower co-product income and lower profits from industrial ingredients. In addition, the underlying contribution from ethanol for the first half is expected to be below that of the previous period because of lower unit margins.
Tate & Lyle said its sugar business has continued to perform marginally ahead of expectations, but noted that the company’s E.U. sugar refining business has continued to experience difficult market conditions.
The company’s sucralose business, meanwhile, has achieved double-digit volume and single-digit revenue growth over the comparative period, reflecting demand and customer restocking.
"As our customer incentive plans generate volume, average selling prices will trend lower," the company said. "The mothballing of the McIntosh, Ala., plant is proceeding ahead of schedule, accelerating the benefits from lower cost production and we have achieved operating margins somewhat above our expectations. The Alabama plant is now being maintained in a state whereby it can be restarted within a few months."