Associated British Foods (ABF), the parent company of Kingsmill, has ended the 16 weeks to 3 January 2015 with revenue 3% ahead of the same period last year.
EU sugar prices, which had been lower in the period, are now seeing some stabilisation, said the firm. Sugar content in the beet is lower than last year, but is counterbalanced by good sugar extraction rates.
UK sugar production in the current year is now estimated to be 1.40m tonnes, up from last year’s 1.32m tonnes.
ABF’s Africa-based sugar subsidiary Illovo has performed consistently throughout the period, but cane availability was restricted in South Africa. Sugar prices in Africa have remained relatively stable with the exception of Tanzania, where low-cost imports continue to hold back domestic prices.
A company statement said: “This year we expect grocery, ingredients and agriculture to make further progress in operating profit on the back of their very positive performance last year. With the fall in EU sugar prices and weakness in the world sugar price, we expect a further large reduction in profit from AB Sugar, but this will put much of the effect of the structural changes in EU prices, seen over the last three years, behind us.
“We expect a decline in adjusted operating profit for the group, but the impact on earnings will be mitigated by much lower tax and interest charges. Sterling’s strength against most of our major trading currencies will also have a negative effect and we now expect a marginal decline in adjusted earnings per share for the group for the full year.”