Tate & Lyle issues the following routine trading update including comments on sweetener pricing negotiations and a statement on Western Sugar.
Current Financial Year
Underlying trading in the Group for the 9 months to 31 December 2001 has continued to be in line with plan and significantly ahead of the comparable period. This, together with delivery on our disposal programme, has enabled good progress to be made on reducing net debt.
Amylum has outperformed the previous period as has Staley, despite results from its citric product line where global oversupply has caused a further reduction in selling prices.
The sugar businesses have performed in line with our expectations.
In Mexico, the recent imposition of a discriminatory tax on soft drinks, against which opposition is mounting, will reduce profits at Almex. This will be partially offset by an improvement at Occidente, due to customers switching from High Fructose Corn Syrup (“HFCS”) to sugar.
The outlook for the Group for the second half-year remains positive and has not altered since the announcement of our interim results on 7 November 2001.
Sweetener Pricing Negotiations
In the past few weeks Staley has completed over 75% of those HFCS and sweetener contracts in the US that are renewed on a calendar year basis. Based on those contracts that have been agreed, we expect increases in average selling prices for calendar 2002 of 5 percent.
The European market has been competitive. Most of the contracting has been for periods of less than 12 months and Amylum has seen average sweetener and starch selling prices marginally reduced.
Western Sugar
The Rocky Mountain Sugar Growers Co-operative has been unable to secure financing, which meets the terms of our agreement, for its purchase of Western Sugar. The agreement for the sale has therefore lapsed. Whilst this is disappointing, Western is currently trading profitably and we expect results in the year ending March 2003 to be no worse than break even. Management will continue to examine ways to extract value from the business with disposal remaining our preferred option.
Outlook
The Group’s performance will benefit from the disposal in November 2001 of Domino Sugar, which made a loss before interest of £18 million in the six months to 30 September 2001.
We anticipate that the sweetener price increase in the US will lead to a further improvement in Staley’s performance in the financial year to March 2003.
At Amylum, a shift in contracted volumes to higher value added products is expected to offset weaker prices. The delivery of net integration benefits is expected to produce an improvement in performance in the financial year to March 2003. Progress on integration is on track to achieve our targeted gross savings of £50 million p.a. by financial year ending March 2004.
We continue to view the future with confidence.
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About Tate & Lyle PLC:
Supported by our 165-year history of ingredient innovation, we partner with customers to provide consumers with healthier and tastier choices when they eat and drink. We are proud that millions of people around the world consume products containing our ingredients and solutions every day.
Through our leading expertise in sweetening, mouthfeel and fortification, we develop ingredients and solutions which reduce sugar, calories and fat, add fibre and protein, and provide texture and stability to food and drink in categories including beverages, dairy, bakery, snacks, soups, sauces, and dressings.
Tate & Lyle recently acquired CP Kelco, a leading provider of pectin, speciality gums and other nature-based ingredients to create a leader in mouthfeel, significantly enhancing our solutions capabilities. Following this combination, we now have more than 5,000 employees working in around 75 locations in 39 countries, serving customers in more than 120 countries. Science, Solutions, Society is our brand promise and how we will achieve our purpose of Transforming Lives through the Science of Food. By living our purpose, we believe we can successfully grow our business and have a positive impact on society. We live our purpose in three ways, by supporting healthy living, building thriving communities and caring for our planet.
Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. For the year ended 31 March 2024, and on a pro forma basis which assumes for illustrative purposes that the combination with CP Kelco took place on 1 April 2023, revenue for the enlarged Tate & Lyle Group would have been £2.25 billion. For more information, please visit www.tateandlyle.com or follow Tate & Lyle on LinkedIn, X (Twitter), Facebook or YouTube
