ClickAJob News

Sugar refiner Tate & Lyle has reported a 19 per cent drop in first-half profits, in the wake of three profit warnings issued by the group this year.

The company revealed that its adjusted pre-tax profit slumped to £120 million in the six months to September 30th, down from the £149 million reported for the corresponding period last year.

Tate & Lyle blamed "difficult conditions" in international sugar trading and the impact of a weaker dollar for the fall.

It added that rising cereal prices and increasing freight costs had also impacted upon the company's efforts to restructure its operations.

"A dramatic increase in European cereal prices, a mark-to-market charge for increased freight costs and lower trading profits in our international sugar trading business, and further weakening in the US dollar have made this transition even more challenging than we anticipated at the beginning of the financial year," Tate & Lyle said.

But while profits within the company's sugar business slumped, Tate & Lyle stressed that its food ingredients operations had performed well.

In sugar profits dropped to £14 million during the first-half, substantially lower than the £32 million profit reported for the corresponding period in 2006.

However the maker of the calorie-free sweetener Splenda revealed that its total sales lifted by one per cent to £1,662 million, with a nine per cent increase in sales across its Food and Industrial Ingredients business for the Americas largely responsible for the increase.

Tate & Lyle said its European food ingredients arm faced "significantly" higher corn costs amid rising world cereal prices during the first-half, but said stronger prices for nearly all its by-products had partially offset the increase.

But the company warned that the full impact of the higher corn prices would be felt by its business during the second-half of the year.

"Prices touched record highs at the end of August and, despite some recent modest retrenchment, remain highly volatile," Tate & Lyle stressed.