The British sweetener and starch producer posted a first half pre tax profit of £180M for the six months to the end of September, which represents a 32% jump compared with the same period of last year.
Sales increased by 14% to £1.54bn on the back of higher volume sales of speciality starch-based ingredients and high intensity sweeteners, as well as higher by-product values.
“A few things went our way,” a spokesman for Tate & Lyle told FoodManufacture.co.uk. “We’ve got a resilient stock, the commodities market went in our direction, and our new chief executive, who came in 18 months ago, has put in place changes to create a culture that is more focused on performance.”
The London-based company, which sold its sugar refining business last year as part of a strategy to concentrate on food ingredients and reduce its exposure to commodity markets, organises its portfolio in two divisions: bulk ingredients and speciality food ingredients.
The bulk ingredients business produces sweeteners, industrial starches, acidulants, ethanol and their co- or by-products, namely corn oil, corn gluten feed and corn gluten meal.
While bulk ingredient volumes were lower, sales increased by 17% to £1.09bn, driven by firm demand for corn sugars in the US and Mexico and improved industrial starch margins particularly in Europe.
In addition, by-product prices were kept firm by high corn prices and high levels of demand.
Tate & Lyle’s strategy is to grow its speciality food ingredients business, supported by cash generated by bulk ingredients.
The past six months have seen sales of speciality food ingredients – which include corn-based food starches, dietary fibres under the Promitor brand, Splenda sucralose and Tate & Lyle’s new Purefruit fruit-based calorie-free sweetening ingredient – increase by 9% to £450M. Profit rose by 7%.
High intensity sweetener volumes were particularly strong, up 17% versus the first half of last year. But average selling prices for Splenda were lower as a result of the company’s strategy of securing long-term customer contracts with volume incentive arrangements.
In modified food starches, Tate & Lyle said sales volumes were driven by rising demand for packaged foods in emerging markets and demand from the snacks industry in Europe.
The company’s corn-based starches benefited from a shortage of potato starches in Europe. High sugar prices boosted demand for corn sweeteners, in particular in cost-optimisation projects.
Regarding full-year results, Tate & Lyle said it expects to deliver good growth for speciality food ingredients, driven by higher volumes and sales growth.
“As a result of H1, expectations for our full year figures will be adjusted upwards a little. So we’re comfortable with where we are, but we’re never complacent,” the spokesman told FoodManufacture.co.uk.