Danish sugar producer Danisco today [Tuesday] reported earnings in the second quarter slightly ahead of market forecasts, but painted a negative picture for its food ingredients division.

Consolidated group net profit climbed 9% to DKr256m (US$36.82m) compared with the year-ago period, reported Reuters. Net turnover in the quarter stood at DKr4.41bn while EBITA (earnings before interest, tax and amortisation) stood still at DKr627m, ahead of the expected DKr609m which emerged from a Reuters poll of analysts.

The group reiterated a previous forecast of net profits worth DKr1bn for the full year 2002-03, on sales of DKr16.7-17.8bn. However, Danisco reduced its full-year EBITA forecast for the key in ingredients and sweeteners business, widely seen as the future growth driver for the company. Forecast full-year EBITA for the division was lowered from DKr1.4-1.5bn to DKr1.4bn.

"The continued adverse development in exchange rates and the expected lower operating margin in flavours imply a reduction of the full-year earnings forecast," Danisco said.

The stock market reacted negatively to the news, with shares falling 1% by the end of the morning.