US sugar processor Imperial Sugar has reported increased quarterly net income but warned challenging market conditions were set to continue.
The company reported net income of US$6.5m, or 59 cents per share, for the first quarter to 31 December, compared to $3.5m, or 32 cents per share, for the first fiscal quarter of the prior year. The company said the improvement in net income included pre-tax gains on asset sales of approximately $6.2m ($3.9m after tax) in the latest quarter, compared to a pre-tax loss on asset sales of $0.1m in the year-ago period.
First-quarter net sales were $260.0m, compared to $256.0m in the same period a year earlier, an increase of 1.6%. This increase was primarily due to higher consumer and foodservice sales volumes of 3.9% and 11.2% respectively, partially offset by a 1.0% decline in prices. Imperial said a continuing surplus of sugar on the market as a result of a large domestic sugarbeet crop has resulted in increased competitive pressures and a reduction in sales prices in the three months to 31 December compared to a year earlier.
“We are pleased with our first quarter net income results and believe that the quarter’s financial and operating results were solid in the face of challenging sugar industry and energy markets,” said president and CEO Robert Peiser.
“Unfortunately, though, we expect the trend of lower margins caused by the difficult environment to continue this fiscal year, absent a change in supply and demand fundamentals in the domestic sugar market or significant decreases in energy costs,” he added.
However, the company said its efforts were focused on mitigating the challenging conditions through improved efficiencies as well as through innovative packaging advancements and other actions designed to improve the performance of its retail brands.
Imperial Sugar is one of the largest processors and marketers of refined sugar in the US, with its products destined for food manufacturers, retail grocers and foodservice distributors. Its brands include Imperial, Dixie Crystals, Pioneer, Spreckels and Holly.