LONDON (Alliance News) - British-based multinational agribusiness, Tate & Lyle PLC Thursday reported a drop in profits in the first-half of the year, despite an uptick in sales, as sweetener volumes in both of its divisions were held back by a soft US beverage sector.
The speciality food and bulk ingredients manufacturer, reported a 6% fall in its first-half pretax profit, to GBP158 million, from GBP168 million a year earlier. On a constant currency basis, its pretax profit declined by 9%.
It reported a net profit of GBP130 million, down 21% from GBP164 million the prior year, as its reported a profit of GBP24 million from its discontinued former sugars businesses last year.
The group said its expects to deliver another year of profitable growth, and increased its interim dividend by 5.4% to 7.8 pence per share.
Tate & Lyle reported sales growth of 7%, or 4% on a constant currency basis, to GBP1.74 billion, compared with GBP1.63 billion a year earlier.
It said that it saw good sales growth in its speciality food ingredient business, up 10%, driven by strong volume growth in emerging markets. The division reported an operating profit of GBP112 million during the period, up 3%.
Tate & Lyle said that it expects a stronger performance from its bulk ingredients business in the second half of the year, with solid demand for liquid sweeteners in North America, and lower corn prices in Europe, more than offsetting the impact of lower sugar prices on isoglucose margins.
In the first six months to September 30, its bulk ingredients business reported an adjusted operating profit of GBP92 million, down 9% on last year's GBP101 million, due to lower US sweetener volumes.
The group said its balance sheet remains strong, and it reduced its net debt by GBP143 million, to GBP336 million.
Tate & Lyle shares were trading 1% higher Thursday morning, at 801.00 pence per share.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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Tate & Lyle (TATE)