Sugar and sweetener manufacturer Tate and Lyle has announced a 27 per cent increase in first half profit, following a strong performance from its American food and industrial ingredients business.
The UK-based company said that its profit before tax, exceptional items and amortisation for the six months to September 30th was £173 million, in line with analysts' forecasts.
Meanwhile, sales were up nine per cent to £2 billion.
Tate and Lyle said that its food and industrial ingredients division which operates in the Americas "performed very strongly across most product categories", reporting a profit of £87 million during the first-half, representing an increase of £32 million over the period.
In a statement, the company said that profitability from value-added food and industrial ingredients, commodity sweeteners and ethanol continued to grow in the Americas both in terms of higher volumes and margin gains over the first half, with Tate and Lyle expecting further margin improvements during 2007 following the opening up of the Mexican sweetener market.
Tate and Lyle said that profits for its European food and industrial ingredients business were £12 million higher over the first half to £40 million, compared to the same period in the previous year.
However, the company warned that current oversupply in the European sugar market, coupled with recent changes to the EU sugar regime, meant that profits for its European operations during the second half were expected to be "significantly lower".
Higher cereal and energy costs are also expected to impact upon Tate and Lyle's performance into next year, with wheat prices in particular having risen sharply in recent months as a result of lower global production coupled with increased demand.
Tate and Lyle, which last week announced that it was planning to sell its European food and ingredients unit to focus on its US operations, added that the outcome of the decision remained "uncertain".
"The timing and outcome of this process are both uncertain and further announcements will be made when appropriate," said the company, which announced that it was considering plans for a full or part disposal of the business in light of the new EU regulatory regime for the sugar industry, which came into operation in July.