Corn Products annual net income rises

by World Grain Staff
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WESTCHESTER, ILLINOIS, U.S. — Corn Products International, Inc. reported on Feb. 17 that net income for the year was $176.1 million, a 277% increase from the $46.7 million in 2009. Annual diluted earnings per share were up 307% to $2.20 from 54¢ in 2009.

Full year 2009 EPS included $1.47 of impairment and restructuring charges while full year 2010 included $1.04 of charges related to impairment and restructuring expenses as well as acquisition, integration and other costs related to National Starch. Excluding these items from both periods, full year adjusted EPS was up 61% from $2.01 to $3.24 for the year. For both the quarter and full year, National Starch operations had an estimated positive EPS impact of 23¢.

"We're pleased to report strong results for the full year, primarily driven by organic volume growth, lower input costs, higher utilization rates and the impact of owning National Starch for the entire fourth quarter," said Ilene Gordon, chairman, president and chief executive officer. "Our performance reflects the ongoing benefits of executing against our Strategic Blueprint and achieving meaningful cost reductions. Looking ahead, we see substantial opportunities to generate further growth from an improving portfolio particularly in specialty products from National Starch as well as ongoing geographic expansion."

Net sales for the full year rose 19% from $3.67 billion to $4.37 billion, driven by $772 million of incremental volume of which $351 million relates to National Starch, and a $161 million benefit from foreign exchange. These amounts were partially offset by a $238 million decline in price/mix, reflecting the normal relationship between lower corn costs and the corresponding decline in selling prices.

For the full year, gross profit rose 39$ from $520 million to $724 million and gross profit margin increased to 16.6% compared to 14.2 percent in 2009. This was largely a result of organic volume growth, better utilization rates, lower input costs and the National Starch business.

Fourth quarter net sales rose 47% from $959 million to $1.41 billion. The increase is attributable to higher volumes of $416 million which were largely a result of an incremental $351 million of sales associated with the National Starch business, $20 million of improved pricing and $12 million from favorable foreign exchange rates. The company managed through higher input costs while also delivering incremental volumes in all regions.

Fourth-quarter EPS declined 9% to 67¢ compared to 74¢. The fourth quarter of 2010 included 38¢ of charges resulting from acquisition, integration and other costs related to National Starch. Excluding these items, adjusted EPS rose 42% from 74¢ to $1.05 in the quarter. Fourth quarter net income was $52 million, down 8% from $56.3 million.

Gross profit increased by 51% in the fourth quarter from $163 million to $246 million, expanding the gross profit margin from 17% in the year ago period to 17.5% this year. The improvement in gross profit and gross profit margin was primarily driven by the National Starch business and the improvement in North America, South America and Asia.

Fourth quarter operating income was up 4% from $99 million to $103 million. On an adjusted basis, excluding acquisition costs of $18 million and charges of $28 million largely related to the fair value mark-up of acquired inventory, non-GAAP operating income for the fourth quarter was $148 million, up 49% from $99 million in the same period last year. The primary driver of the increase was $42 million of incremental operating income from the National Starch business. Organic volume growth, improved price/mix and favorable foreign exchange rates also contributed to the increase.

Operating income for the full year increased 122% from $153 million to $339 million. Non-GAAP operating income, adjusted to exclude restructuring and acquisition-related costs, rose 53% from $278 million to $426 million.
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