Tate & Lyle Helped by “Significantly Higher” Splenda Profits
22 Jul 2016 --- Sales of sugar substitute Splenda helped the UK ingredients supplier Tate & Lyle report improved profits from the year before, in its latest financial update.
In its trading statement from April 1 to June 30, Tate & Lyle said it had made a "strong start" to the year, boasting profits ahead of last year, helped by the weakened value of the British pound.
The update follows last month's results when it reported a fivefold uplift in profits, as it recovered from a steep fall in Splenda prices.
Excluding profits at Splenda, profit was slightly ahead of the comparative period reflecting good margin improvement.
However, overall volume sales were slightly lower than last year, with good growth in Europe, Middle East and Africa, which benefited from the acquisition of the Slovakia facility, and stabilisation in Latin America, offset by softer demand in North America and Asia Pacific.
Splenda's profits were "significantly higher" than last year amid strong volume growth.
Bulk Ingredients performed strongly with profit well ahead of the comparative period due to solid demand at the start of the US summer beverage season, robust US bulk sweetener margins, and strong manufacturing performance.
In Commodities, performance was broadly in line with its performance last year.
Less than two percent of Tate & Lyle’s revenues are generated in the United Kingdom, with most revenues being US dollar based.
If the current weakness of the British pound continues it means that earnings at Tate & Lyle should improve strongly this year.
Chief executive Javed Ahmed is continuing to look at restructuring the business, following a difficult 2015, in which it was also impacted by
supply issues in the US.
supply issues in the US.
In 2015, Tate & Lyle offloaded its European bulk ingredients unit and is looking to focus on its speciality food ingredients business.
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