“Tate & Lyle made progress in the first six months against the backdrop of a strong first half last year, softer market conditions in Europe and the step change in fixed costs associated with the restart of our Splenda sucralose facility in McIntosh, Ala., and business transformation initiatives,” said Javed Ahmed, chief executive, when results were given Nov. 8. “Despite facing a number of headwinds this year, I am pleased that the business continues to perform solidly.”
Six-month sales rose 7% to £1,631 million ($2,590 million) from £1,540 million.
In the company’s Specialty Food Ingredients segment, sales increased 5% to £471 million in the six-month period from £450 million, but adjusted operating profit dropped 7% to £108 million from £116 million.
The Specialty Foods Ingredients segment comprises three product categories in starch-based specialty ingredients, high-intensity sweeteners and food systems.
Volumes increased 3% and sales rose 12% to £273 million for starch-based specialty ingredients over the six-month period. Modified food starches saw volume growth in the United States and Asia.
Within high-intensity sweeteners, six-month volumes were 8% lower than last year, when Tate & Lyle customers introduced a number of new products with Splenda sucralose. Six-month sales decreased 4% to £103 million from £108 million.
“We are also making progress developing the market for Purefruit monk fruit extract, our zero-calorie, fruit-based natural high-intensity sweetener, with new product launches in the U.S. table-top market in the period building on the strong consumer interest in natural high-intensity sweeteners,” Tate & Lyle said.
Food systems sales in the six-month period dropped 4% to £95 million from £98 million, largely because of a weakening euro. Raw material prices remained high.
In the company’s Bulk Ingredients segment, adjusted operating profit in the six-month period was £101 million, up 6% from £96 million in the same time period of the previous year. Six-month sales rose 6% to £1,160 million from £1,090 million. Strong performance from sweeteners in the United States and Europe more than offset co-product returns that were in a more normal range after being in a higher range in the same time period of the previous year.