LONDON, ENGLAND — Tate & Lyle announced on May 26 adjusted profit before tax of £193 million ($282 million) for the year ended March 31, up 5% from £184 million in the previous fiscal year.

The company reported sales of £2.355 billion, up 1% from £2.341 billion.

“This has been a year of solid financial performance and strong project delivery. Both business divisions delivered margin expansion and we completed the major structural change initiatives needed to further strengthen the business and drive higher quality earnings,” said Javed Ahmed, chief executive. “We also made progress against the 2020 Ambition we outlined in
November 2015. Turning to the outlook for the 2017 financial year, subject to currency movements, we are confident the group will continue to make progress in line with our plan and towards our 2020 ambition.”
Bulk Ingredients core business delivered strong performance. Margins improved significantly as the U.S. corn wet milling industry dynamics remained well-balanced. The company also saw manufacturing efficiency improvements.

This strength in the core business largely offset the performance of commodities which deteriorated sharply in the face of extremely challenging market conditions, especially in U.S. ethanol. Commodities reported a loss of £9 million, a reduction of £29 million from the 2015 financial year.

Bulk ingredient sales dipped 1% to £1.458 billion. Adjusted operating profit in bulk ingredients increased 1% to £84 million. Commodities faced a challenging environment as high ethanol inventories and low gasoline prices in the U.S. pressured industry margins.

“The fundamentals of the U.S. ethanol industry do not show any near-term signs of improving and, therefore, we expect returns from U.S. ethanol to remain weak in the 2017 financial year,” Ahmed said.

In Europe, Tate & Lyle completed the realignment of its Eaststarch joint venture corn wet milling business with Archer Daniels Midland Co., Chicago. Tate & Lyle acquired full ownership of the more specialty-focused facility in Slovakia and exited the predominantly bulk ingredients plants in Bulgaria, Turkey and Hungary.

“With the completion of these initiatives, Europe is now largely focused on specialty food ingredients, with nearly all the region’s profit coming from that business,” Ahmed said

The company has a goal of generating 70% of its profit from specialty food ingredients, including sucralose. The percentage increased to 60% during the fiscal year ended March 31.

Specialty food ingredient sales in the fiscal year reach £897 million, up 4% from the previous fiscal year. Adjusted operating profit rose 10% to £150 million. Profit was adjusted to exclude exceptional charges, net retirement benefit interest and amortization, said Nick Hampton, chief financial officer.