Tate & Lyle profits down in second quarter due to US softness

4th Oct 2013 07:14

Sweeteners and food ingredients group Tate & Lyle said that adjusted operating profits in the second quarter were in line with expectations but slightly below last year due to softness in the US beverage sector. The company said this was as a result of the cold spring and slow start to the summer which has affected sweetener volumes in both divisions in the three months ended September 30th.In the Speciality Food Ingredients (SFI) division, volume growth was in line with the wider market as a strong performance in the emerging markets and Europe was partially offset by lower volumes in the States across its higher-margin speciality sweeteners. "This, together with lower selling prices for Splenda Sucralose, is expected to result in operating profit in this division being broadly in line with the prior year period in constant currency."Meanwhile in Bulk Ingredients, operating profits have fallen year-on-year due to lower US bulk-liquid sweetener volumes. Nevertheless, Tate maintained its guidance for "another year of profitable growth" in the year to March 2014.Progress is expected in the SFI division with growth targeted in volumes, sales and profits across all regions, while trading in Bulk Ingredients remains in the second half is expected to improve year-on-year."Our profits remain sensitive to fluctuations in foreign currency particularly the US dollar to sterling exchange rate. In addition, as usual, the outcome of the calendar year sweetener pricing rounds will influence performance in the final quarter of the financial year."Tate & Lyle's first-half results will be released on November 7th.BC