Tate & Lyle off to 'satisfactory start'

Tate & Lyle P.L.C. on Wednesday said it has made a "satisfactory start" to the year, with pre-tax profit in the first quarter broadly in line with same period a year ago.

The company said its food and industrial ingredients segment in the Americas benefited from improved byproduct returns driven by "volatile and exceptionally high" corn prices. Partially offsetting the returns were some additional costs related to new technology at the company’s Loudon, Tennessee, U.S., corn mill.

In the company’s European food and industrial ingredients segment, meanwhile, Tate & Lyle said co-product prices compensated for higher energy prices, while the Food Systems businesses continued to perform well.

Sucralose, the low-calorie sugar sweetener that Tate & Lyle markets under the Splenda brand, posted strong sales volume growth in line with expectations, though the company did note that the increase in sales prices was slower than anticipated.

Challenges continued to persist in the company’s European Union (E.U.) sugars business and are expected to do so during the next six months. Tate & Lyle said the business is "operating in a very difficult market while surplus stock is absorbed in anticipation of the first reduction in the E.U. reference prices, which will take place on Oct. 1." As part of that reform, sugar prices are expected to be cut by nearly 40% by 2010.

Tate & Lyle did indicate that the second half of the year may deliver market equilibrium between supply and demand for E.U. sugar.