(Alliance News) - Sweeteners and food ingredients maker Tate & Lyle PLC on Monday said results for the year to March-end will be "slightly ahead of our guidance," saying that lockdowns across core US and European markets have resulted in significant changes in demand.
"While trading in March showed limited impact from the Covid-19 pandemic, the lockdowns in place in many countries across the world throughout April, most notably in our largest markets of the US and Europe, have led to some significant changes in demand patterns for our products," the FTSE 250-listed company explained.
Food & Beverage Solutions and Sucralose sweeteners continued to perform well in April, Tate & Lyle said, with volume for Food & Beverage Solutions in line with the comparative period and Sucralose 18% higher due to phasing of customer orders.
Primary Products volume in April was significantly hurt by the first full month of lockdown in the US. Bulk sweetener volume was 26% lower, while industrial starch volume was 9% lower. Commodities also were also affected as ethanol prices decreased sharply.
Tate & Lyle said it was able to partially mitigate the financial impact of lower demand by cash conservation and cost reduction, including freezing salary increases and recruitment, stopping non-essential discretionary spend and reprioritising capital commitments.
"The fact that all our manufacturing facilities have remained fully operational during the pandemic and customer orders have continued to be fulfilled, often at very short notice, is a testament to the commitment and skill of all our employees." said Chief Executive Nick Hampton.
At March 31, the company had access to over USD1 billion through cash on hand and a revolving credit facility.
Shares in Tate & Lyle were down 2.7% at 676.40 pence each in London early Monday.
By Tapan Panchal; tapanpanchal@alliancenews.com
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Tate & Lyle (TATE)