Falling artificial sweetener prices will impact Tate & Lyle profits, the company has warned.
Published in its interim management statement for the three months ended 31 December 2013, the company anticipated an increase in the rate of price decline for its sucralose-based sweetener Splenda during the final quarter, with prices expected to be 15% lower in the 2015 financial year.
Tate & Lyle added that cheaper supply from China on sucralose was impacting sales.
The company said that full-year profits will be broadly in line with the previous year, citing operating performance in the third quarter and lower Splenda sucralose pricing in Q4.
In Speciality Food Ingredients, the company said volumes were broadly in line with the prior year period. Strong growth in emerging markets was, it said, offset by softness in developed markets.
In Bulk Ingredients, the business saw an improved performance from US sweeteners and US ethanol relative to the comparative period. It added, however, that “lower returns from co-products held back the division’s performance overall”.
It reported that, in the 2014 financial year, it expects to see profit growth in all product categories across Speciality Food Ingredients.
Net debt fell from £336m on 30 September 2013 to £253m on 31 December 2013.
Additionally, the completion of the back-to-back purchase, sale and lease-back of Tate & Lyle’s Global Commercial and Food Innovation Centre in Chicago generated a profit of £6m. The majority, the business said, was included in the Speciality Food Ingredients division.