As reported by the company this morning for the six months to 30 September 2012, adjusted operating profit rose by 1% to £195m, while statutory profit declined by £69m to £172m.
Tate & Lyle attributed this loss to “an exceptional credit” relating to the restart of its McIntosh sweeteners plant, based in the US, which was shut down around two years ago, but re-opened this summer.
Javed Ahmed, chief executive of Tate & Lyle, said: “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, Alabama and business transformation initiatives. Despite facing a number of headwinds this year, the business continues to perform solidly.”
Other financial highlights for Tate & Lyle included its Speciality Food Ingredients business, consisting of starch-based speciality ingredients, high-intensity sweeteners and food systems, which saw volumes increase by 3% and sales rise by 5% to £471m, but adjusted operating profit decline 7% to £108m.
The company said its European markets remained weak during the period, but had experienced a “solid start” to the second half, with good volume growth in October as well as the first seven months of the year in line with the market.
Tate & Lyle’s Bulk Ingredients division managed to achieve a 6% lift in sales to £1.16bn, which it said was on the back of higher corn prices, while volumes were 1% lower than expected.
Graham Jones, executive director, equity research at Panmure Gordon, said: “Tate’s H1 results were in line with expectations, with profit before tax rising by 2%, earnings per share by 1% and dividend per share by 4%. Speciality Food Ingredients saw profits fall by 7% driven by a step-change in fixed costs, while Bulk Ingredients performed very well to deliver 7% profit growth despite lapping £19m of co-product gains last year.
“We note a number of new product launches such as Tasteva stevia sweetener, Soda-Lo salt reduction ingredient and Hamulsion, an egg replacement product, which points to a healthy future for the Speciality Ingredients business.”