WESTCHESER, ILLINOIS, US — Volume recovery and increased consumer mobility underpinned Ingredion Inc.’s second-quarter results.
“Our results are particularly noteworthy when recognizing that we have been able to react to the sudden snapback of exceptionally strong customer demand as our teams work closely with customers to meet their changing needs,” said James P. Zallie, president and chief executive officer, during an Aug. 3 conference call to discuss results. “Furthermore, our strong top-line growth is evidence of the breadth and diversification of both our product line and customer base and the importance of the ingredient solutions we provide across many different sectors of the food and beverage spectrum.”
Net income for the quarter ended June 30 totaled $178 million, equal to $2.65 per share on the common stock, and a significant jump over the same period of the previous year when the company earned $66 million, equal to 98¢ per share.
Quarterly sales rose 31% to $1.76 billion.
In North America, the company’s largest business unit, sales rose 26% to $1.07 billion. Segment operating income rose 48% to $149 million.
“North America net sales were up significantly for the quarter when compared to the prior year,” said James Derek Gray, chief financial officer. “This was driven by volume recovery from the pandemic impacts on consumer mobility in the same quarter last year, the pass-through of higher corn costs and continued specialty ingredients growth. These increases were partially offset by the cessation of ethanol production at our Cedar Rapids (Iowa) plant.”
Specialty ingredients, which include starch-based texturizers, sweeteners and plant-based proteins, now account for 33% of the company’s sales. Management has set a target for specialty ingredients to make up 38% of sales by 2024.
“South America led our growth this quarter with 46% specialties growth driven by volume and price mix,” Zallie said. “Asia Pacific also performed exceptionally well with 41% specialties growth in the quarter, led by growth from the sugar-reduction platform, which included acquisition growth from the inclusion of PureCircle.”
Zallie said PureCircle, which Ingredion acquired in April 2020, is ahead of management’s first-half expectations.
“Most importantly, PureCircle's project pipeline continues to expand and new customer wins are being led by breakthrough bioconverted Reb M sales and flavor blends,” he said.
For the first six months of fiscal 2021, Ingredion recorded a loss of $68 million, which is down substantially from the first half of fiscal 2020 when the company earned $141 million, equal to $2.10 per share.
Sales for the period rose 17% to $3.38 billion.
For fiscal 2021, Ingredion is guiding that adjusted earnings per share will be in the range of $6.45 to $6.85 per share compared to $6.23 in fiscal 2020.