USA: Corn Products International, Inc. reduces annual earnings guidance
Sam Scott, chairman and chief executive officer said, "Until recently, we were within our prior guidance range, despite currency declines, a downdraft in world economic conditions and a spike in Argentine interest rates.
"Subsequently, the tragic events of September 11th have clearly changed business conditions in the short term," Scott added. "Throughout the world, volumes have been affected and in our Rest of World, the value of currencies has dropped significantly, resulting in a reduction of operating income until appropriate pricing recovery can be implemented."
The Company is revising its 2001 guidance because of the world situation, as well as the current lower volume estimates for US/Canada and higher corn costs in Mexico. With the lowered projection for US/Canada, it is slowing production in its US plants to reduce working capital and to be better positioned for 2002.
"We will speak more to 2002 in future press releases," Scott said. "Recent public announcements have indicated a diversion of industry production from high fructose corn syrup (HFCS), other sweeteners and starch to ethanol. In addition, as previously announced, we have entered into a long-term agreement to supply feedstock for the production of citric acid, which will further divert grind from HFCS. Our internal estimates indicate that as much as three percent or more of the HFCS capacity in the industry may have been converted to ethanol, helping set the stage for the future."
Commenting again on the third quarter, Scott concluded, "Despite recent circumstances, we are heartened by the fact that our current estimates of earnings per share for the third quarter are approximately 25 percent more than last year's third quarter, and that we still expect the entire second half to deliver stronger earnings versus the same period last year. We will provide actual third quarter results in our press release on October 16, 2001."
Corn Products International, Inc. is one of the world's largest corn refiners and a major supplier of high-quality food ingredients and industrial products derived from the wet milling and processing of corn and other starch- based materials. The Company is the No. 1 worldwide producer of dextrose and a leading regional producer of starch, high fructose corn syrup and glucose. In 2000, the Company recorded sales of $1.9 billion with domestic and international operations through wholly owned businesses, affiliates and alliances. Headquartered in Bedford Park, Ill., it was founded in 1906. The Company is listed on the New York Stock Exchange under the symbol CPO. Additional information can be found on the World Wide Web at www.cornproducts.com .
This press release contains forward-looking statements concerning the Company's financial position, business and future earnings and prospects, in addition to other statements using words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. These statements contain certain inherent risks and uncertainties. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, stockholders are cautioned that no assurance can be given that our expectations will prove correct. Actual results and developments may differ materially from the expectations conveyed in these statements, based on factors such as the following: fluctuations in worldwide commodities markets and the associated risks of hedging against such fluctuations; fluctuations in aggregate industry supply and market demand; general economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and sell our products, including fluctuations in the value of local currencies, energy costs and availability and changes in regulatory controls regarding quotas, tariffs and biotechnology issues; and increased competitive and/or customer pressure in the corn refining industry. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of risk factors, see the Company's most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q or 8-K.
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