LONDON (dpa-AFX) - Sweeteners manufacturer Tate & Lyle Plc (TATYY.PK, TATE.L), in a trading update, Thursday said it continues to expect to deliver modest progress for the full year ending March 31, 2013. The company also said its performance has been solid and in line with its expectations.
In Speciality Food Ingredients business, it sees solid sales growth for the year, with second-half volume growth slightly ahead of the first half. As expected, volume of sucralose will be slightly lower than last year, the company noted.
The manufacturer of food and industrial ingredients stated that operating profit in the division is likely to be broadly in line with the prior year, due to step change in fixed costs associated with its business transformation initiatives.
The firm's transformation initiatives included restart of the McIntosh facility; investment in global shared services and IS/IT system; as well as development of global Commercial and Food Innovation Centre in Chicago.
In Bulk Ingredients business, Tate & Lyle anticipates a 'good' underlying performance from sweeteners in both the U.S. and Europe. This is expected to more than offset the impact of costs related to handling higher levels of aflatoxin, following the severe drought in the U.S. in 2012 and continued challenging market conditions in U.S. Ethanol. Aflatoxin is a fungus impacting corn quality caused by extremely dry and hot conditions.
Further, Tate & Lyle anticipates its net debt at the end of the fiscal to be slightly higher than the level reported a year earlier. The increase in debt is due to the recent strengthening of the US dollar against sterling.
The company is scheduled to announce its full-year results on May 30.
TATE.L closed Wednesday's regular trading at 825 pence, down 0.84 percent, on the LSE.
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