UK-based sugar and food ingredients firm Tate & Lyle has said trading since its last update on 28 July has continued to be in line with its expectations.
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The company said that profit before tax and amortisation for the five months to 31 August 2005 has met its budgetary expectations and is modestly above the corresponding period of the prior year, despite higher interest charges as the company invests for growth.
Tate & Lyle said its Splenda sucralose has continued to enjoy strong demand across all major food, beverage and pharmaceutical categories. Similar to 2005, demand from existing customers is expected to outpace production through the year to March 2006. The expansion projects to increase sucralose production capacity in Alabama, USA and Singapore are on schedule and the related capital expenditure is in line with budget, the company said.
“We are aware that a no-calorie sweetener tabletop product containing sucralose and called ‘Altern’ has been available in one or two stores in the USA. We have determined that the sucralose contained in the product was manufactured in our facility in McIntosh, Alabama. This product has now been withdrawn from sale,” Tate & Lyle said.
The company said profitability in its EU sugar refining business has been substantially reduced with oversupply in the market coupled with the expected higher cost of export licences. Energy costs were also higher. This profit reduction has partially been offset by a good performance in sugar trading. In Canada, performance has been as expected, but below the level of the comparative period.
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By GlobalData“Overall, our expectations for the full financial year to March 2006 remain unchanged. Looking further forward, if prevailing energy prices persist through our financial year 2007 it would increase our costs by around £40m (US$70.6m). We aim to recover this through product pricing,” the company added.
