Tate & Lyle says U.S. cold spring hits first-half profit

Reuters

LONDON (Reuters) - British sweetener maker Tate & Lyle (LSE:TATE) forecasted another year of profitable growth on Friday, but said first-half profits had been hit by the cold spring weather in the U.S. and a slow start to the summer.

Tate & Lyle, whose brands include zero-calorie sweeteners Splenda and Tasteva, said the colder weather had affected sweetener volumes across its two divisions and that it expected adjusted operating profit for the six months to September 30 to be lower compared to the same period last year.

The company said it expected operating profits for the period at its speciality food ingredients business to be broadly in line with the prior year, following slower demand in the U.S. beverage sector and lower selling prices for sucralose.

It said first-half operating profits at its bulk ingredients business was expected to be hit by lower sweetener volumes, but said it anticipates the division to post a stronger performance in the second half thanks to solid demand in North American and lower corn prices.

Tate & Lyle has shifted its focus in recent years to develop its more profitable speciality food ingredients business, including sweeteners and starches, which made up 30 percent of sales last year, away from bulk ingredients operations.

The company said that its profits were sensitive to currency fluctuations, particularly that of the U.S. dollar to sterling, and said that the outcome of the calendar year sweetener pricing rounds would affect its final quarter performance.

Shares in Tate & Lyle closed at 739 pence on Thursday, valuing the company at 3.46 billion pounds ($5.59 billion). ($1 = 0.6184 British pounds)

(Reporting by Brenda Goh; Editing by Lorraine Turner)

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