Corn Products posts strong results for second quarter
results, with a strong performance from the company's North
American operations offsetting a decline in its South American
The company saw an 8 percent increase in net sales for the quarter to $645m, compared to last year's equivalent of $596m. This pushed net sales for the first six months up to $1,260m.
Main drivers behind the sales increase were higher product volumes, favorable currency translations and increased prices, said the firm.
"Our solid second quarter performance gives us more confidence that 2006 should be a record year. We're pleased with the improving profitability in our North American region. Our South America business still suffered from cost and pricing pressures in Brazil and Argentina, but we see these conditions beginning to improve in the second half," said Sam Scott, chairman, president and chief executive officer of Corn Products International.
Gross profit in the second quarter rose 16 percent to $104.5 million, while the company's operating income of $57m rose 10 percent from $52m last year.
Indeed, operating income for the company's North American business, jumped ahead by almost 80 percent, to reach $37m, compared to prior year figures of $21m. This pushed the company's six-month figure up by 161 percent to reach a total of $61m.
In contrast, operating income in South America slumped 25 percent to $17m in the quarter and 26 percent to $36m in the first half.
Performance in Asia and Africa also saw a decline of 4 percent to reach $15 m in the quarter. According to Scott, this region "performed as expected."
But the company's North American business, which was the principal factor for its improved second quarter performance, recorded operating margins of 9 percent compared to 6 percent in the second quarter of 2005.
"Our North American region should account for substantially all of the 2006 improvement as we still see lower South American results for reasons previously described. However, conditions in Brazil appear to be bottoming and should gradually ease in the second half. Asia/Africa is on course for steady results in 2006," said Scott.
Corn Products International, which is a leading producer of dextrose, starch, high fructose corn syrup and glucose, said it continues to anticipate a 16 to 24 percent increase in EPS in 2006.