Ingredion income climbs 38% in second quarter

by Eric Schroeder
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WESTCHESTER, ILL. — Volume gains and manufacturing efficiencies helped spur strong second-quarter results at Ingredion Inc. Net income at Ingredion in the second quarter ended June 30 totaled $109.1 million, equal to $1.42 per share on the common stock, up 38% from $79.3 million, or $1.03 per share, in the same period a year ago. The most recent quarterly results included a 16c per share benefit from the release of a Korean deferred tax valuation allowance, which partially was offset by 8c of restructuring and impairment charges and 1c of business integration costs.

Non-GAAP adjusted net income in the second quarter of fiscal 2012 was $103.5 million, or $1.33 per share, which compared with $86.2 million, or $1.10 per share, in the same period a year ago.

Net sales during the second quarter of fiscal 2012 totaled $1,635 million, up 3% from $1,584.6 million.

“We delivered a strong second quarter in spite of some macroeconomic volatility and this should set us up to achieve our full year guidance,” said Ilene Gordon, chairman, president and chief executive officer. “Our second-quarter earnings per share was the highest adjusted quarterly result in our company’s history. Underlying this performance are volume improvement and manufacturing efficiencies as well as appropriate price increases to cover higher raw material costs and foreign exchange headwinds. We continue to have a positive outlook for 2012 and expect sales and adjusted e.p.s. improvement compared to 2011.

“Our business model has proven resilient and has mitigated some of the volatility we’ve faced while allowing us to still generate volume and e.p.s growth.”

Operating income in the company’s North America segment increased 38% in the second quarter of fiscal 2012 to $96.9 million from $70.2 million in the same period a year ago. Net sales increased 11% to $949.7 million from $852.6 million.

In South America, operating income was $47.3 million, down 1% from $47.6 million. Net sales also were lower, falling 11% to $349.1 million from $390.3 million.

Operating income in Asia Pacific climbed 2% to $22.9 million from $22.4 million on a 3% gain in sales to $208.1 million from $201.4 million.

In Europe, Middle East, Africa, operating income was $18.8 million, down 13% from $21.7 million a year ago. Net sales totaled $128.1 million, down 9% from $140.3 million in the same period of fiscal 2011.

Ingredion on July 23 said it would restructure its operations in Kenya and close its plant in Eldoret. In line with the announcement, the company recorded an after-tax charge of $4 million.

For the six months ended June 30, overall net income was $203.3 million, or $2.66 per share, down 13% from $232.9 million, or $3.04 per share, in the same period a year ago. Net sales were $3,209.2 million, up 5% from $3,044 million.
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