Sweetener maker Tate & Lyle’s annual profit jumps on price hikes

(This May 25 story has been corrected to say ‘reducing sweetness,’ not ‘reducing sweeteners,’ in paragraph 8)

By Prerna Bedi

(Reuters) – British food ingredients maker Tate & Lyle Plc reported on Thursday a rise of 22% in full-year profit, as higher prices helped mitigate cost inflation.

The company, which is one of the world’s biggest producers of sweeteners, said hiking prices and renewing customer contracts helped maintain margins despite high costs of raw materials such as corn and energy.

Corn prices have been consistently high buoyed by a combination of supply chain issues, fallout from the Ukraine-Russia conflict and weather conditions in major producing areas.

The ingredient supplier to Splenda, a non-sugar sweetener used in diet Coke and other sugar-free drinks, expects 2024 revenue growth in line with its five-year target of 4% to 6%.

“Obviously we would monitor the impact of the WHO findings which were conditional, by the way, but we still see those products playing a key role in that portfolio for the foreseeable future,” Chief Executive Nick Hampton said.

He was referring to comments this month by the World Health Organization (WHO), which said study results showed long-term use of non-sugar sweeteners was related to health issues, such as Type 2 diabetes.

Its guidelines added that there was no consensus that such sweeteners were helpful in weight-loss efforts or conferred other benefits.

“We would agree that reducing sweetness in people’s diets is a key contributor to dealing with things like obesity and diabetes,” Hampton told Reuters in an interview.

Shares in Tate & Lyle were up 2% in early trade.

Early in May, the company’s American peer, Ingredion, had said it expected its annual performance to better expectations as sales volumes recover and corn prices ease.

Tate made 320 million pounds in adjusted core profit, up from 233 million a year ago.

($1=0.7923 pounds)

(Reporting by Prerna Bedi in Bengaluru; Editing by Arun Koyyur and Clarence Fernandez)