Shares in Tate & Lyle were left a little less sugary today, after the Splenda sweetener-maker warned its full-year profits would be hurt by falls in the value of the Mexican peso and Brazilian real.
Tate shares closed down 7.1 per cent to 540p, after it warned full-year reported adjusted pre-tax profit would be “modestly below” the £193m it had previously expected.
The company is exposed to the real and the peso through its joint venture with Almidones Mexicanos and a citric acid plant in Brazil.
Margins at Tate’s food systems division, which makes food ingredients and stabilisers fell in the three months ended December 31st, due to a sharp rise in the cost of some ingredients.
Nevertheless, volumes in food systems continued to grow during this period, and it benefited from the acquisition of Gemacom in December 2014.
The company added that it expects a small loss for the full year from commodities due to weakness in the US ethanol market. It had previously expected this sector to make a “small profit”.
“Commodities continue to have a material adverse impact on performance, especially due to further weakness in the US ethanol market,” it said.