UK-based sugar processor Tate & Lyle said today (28 July) that it has made an “encouraging” start to its financial year, reporting a “strong operational performance” for its first quarter.
For the quarter ended 30 June, Tate said its performance was helped by strong co-product returns, which were partially offset by the impact of currency movements on the translation of profits.
Tate said co-product returns benefited from higher market prices and it “locked in sales further forward than usual to take advantage of strong demand”.
The company’s speciality foods division grew volumes over the first quarter of the previous financial year, driven by solid demand for its corn-based speciality sweeteners and Splenda Sucralose. Tate said its plans to re-open the Splenda facility in McIntosh, Alabama are proceeding in-line with expectations.
However, Tate said it continued to see tough trading conditions in its food systems division, particularly in Russia. It expects these conditions to continue for the remainder of the year.
Demand for liquid sweeteners in the company’s bulk division remained firm in both the Americas and in Europe, the company said. In Europe, starch margins benefited from increased prices for industrial starches, Tate added, although they were largely offset by sweetener margins, which were lower because of higher raw material costs.
Tate said it still anticipates more “normal” co-product returns for the remainder of the year, especially when compared with the strong co-product performance in the second half of last financial year.
Shares in Tate and Lyle were down 0.3% to 613p a share at 11:00 BST today.
