Associated British Foods sugar business has reported boosted profits despite ‘continuing challenges’ in its ingredients businesses.
Reporting its 2012 interim results, Associated British Foods (ABF) said that total profits for the group have grown by 6% thanks mainly to big increases in profit for its AB Sugar business. However, the company added that it had been held back by falling profits in its ingredients business portfolio and ‘disappointing trading’ from AB Mauri and George Weston Foods.
In his interim statement, Charles Sinclair, chairman of ABF said the company’s sugar business has made significant steps to establish itself “as a leader in beet sugar production in Europe and to make it more cost competitive on a global basis.” The result of which has been a massive boost to the business, with operating profits soaring by 59%against last year’s trading - from 108m GBP to 172m GBP.
“AB Sugar’s result was particularly pleasing,” said Sinclair, noting that investment had been directed at improving efficiency, reducing cost and increasing capacity: “Which now exceeds 5 million tonnes annually.”
“With production expected to be 4.5 million tonnes this year, there is still more room to grow," he said.
However the company warned that a combination of high input costs and increased competition for yeast in some regions has underpinned a decline in its ingredients sector. However, Sinclair said the company remains committed to investment in building capacity, “and in developing a sharper and more differentiated offering for both yeast and bakery ingredients.”