The rising cost of raw sugar ate into the bottom line at US sugar refiner Imperial Sugar during its fourth quarter, the company has reported.
Imperial posted a net loss of US$2.3m for the three months to the end of September, compared to a net loss from continuing operations of $188,000 a year earlier.
The fall in profits came despite a 79% jump in fourth-quarter sales to $264.4m. Sales were boosted by increased production at Imperial’s Port Wentworth refinery, which was damaged by an explosion in 2008. Imperial’s success in securing price increases for refined sugar also helped sales.
However, the price hikes failed to offset the cost of raw sugar, which hit Imperial’s margins during the quarter. Imperial’s gross margin stood at 2.7%, against 13.3% a year earlier.
Over the full fiscal year, Imperial generated net income of $136.9m, compared to a loss from continuing operations of $23.8m a year earlier. Net sales jumped 73.6% to $908m.
President and CEO John Sheptor took a look back over the whole of Imperial’s financial year and said the company had made “important strategic steps” while “managing the challenges” of getting the Port Wentworth site back to full capacity.
Sheptor pointed to the start of the construction of a new refinery in Louisiana, its natural sweetener venture and its business in Mexico as “important steps to strengthen our business and a provide a path to a stronger future”.
For the full earnings announcement, click here.