PureCircle expects lower profits in first half due to US border restrictions

5th Jan 2017 10:08

(ShareCast News) - PureCircle, producer and marketer of high purity stevia ingredients, has issued a profit warning after its shipments to the US have been detained by US Customs Border Protection. The investigation has negatively impacted the group's earnings as the US market constitutes one third of the group's sales. Group sales in the first half of 2017 are expected to be 14% lower than the previous period at $47m.Gross profit is expected to be $18m, 19% lower than the first half of 2016 and EBITDA is expected to be $8m, down by $5m due to lower sales and adverse margins.Net loss is expected to be $2m, down from a profit of $5m in 2016.This is was, however, partially offset by strong growth in the rest of the world, such as Europe and Latin America, which makeup over half of the group's sales.Net debt for the first half of 2017 is $80m, up from $46m in the previous period following the planned capital expenditure for the capacity expansion of the group's refinery facility in Kuala Lumpur. The group has cash and facility headroom of $75m, up from $73m in 2016.The company has worked extensively with the US CBP, providing tracking documents and related data in response to their detailed requests and is now awaiting a decision.Chief executive Magomet Malsagov said: "Whilst the US CBP process has been a major distraction for our business in H1 FY17 and has adversely impacted our sales growth in the United States, I am delighted by the continued growth in sales in the rest of the world, which has further diversified our sales footprint, and by the strong customer support that we continue to receive."Our new state of the art, fully automated refinery, encapsulating all the latest technology developments is complete and will be commissioned in the first quarter of cumulative year 2017. With these positive dynamics, and an anticipated resolution to the US CBP issue in the near future, I am confident in our mid to long term prospects and look forward to returning to our growth trajectory."The share price fell 9.06% to 228.25p at 1115 GMT on Thursday.