Tate & Lyle Plc (TATE), the maker of low- calorie sweetener Splenda, said fiscal first-half profit more than doubled, beating estimates, after the company introduced new products and restarted a U.S. plant.
Net income through September rose to 175 million pounds ($278.2 million), or 38.9 pence a share, from 70 million pounds, or 15.1 pence, the London-based company said in a statement today. Adjusted operating profit added 19 percent to 194 million pounds, beating the average estimate of 188 million pounds of six analysts surveyed by Bloomberg. Tate shares jumped.
“We haven’t seen the weakness in the economy affect our business,” Chief Executive Officer Javed Ahmed said on a conference call. “The biggest challenge is how to maintain growth. Until we get some clarity on what is happening in the euro zone, we won’t have much visibility.”
Ahmed has sold Tate’s sugar interests to focus on more profitable units including specialty food ingredients and bulk ingredients.
Sales rose 19 percent to 1.54 billion pounds, compared with a 1.5 billion-pound NCB Stockbrokers estimate.
Tate & Lyle reported a one-time gain of 73 million pounds relating to the decision in May to restart production of Splenda at its mothballed plant in Alabama, offset by 6 million pounds of restructuring charges. “Profits for the full year are expected to be more heavily weighted towards the first half than usual,” the company said in the statement. That was “mainly due to the exceptionally strong performance from co-products during the first half.”
Tate & Lyle shares rose as much as 10 percent, the most in five months, and were up 21 pence, or 3.3 percent, at 668 pence as of 11:00 a.m.
Analysts may “nudge up” current estimates of full-year adjusted operating profit of 305 million pounds as a result of the strong performance of co-products, Chief Financial Officer Tim Lodge said on the conference call.
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