Higher sugar prices and volumes have helped boost third quarter revenues at Associated British Foods, signalling continued strong performance into the second half of the year.
The firm today issued its Q3 Interim Management Statement, covering the 16 weeks to June 19 2010, which reported sales growth from continuing operations of 13 per cent.
Revenue increases were led by ABF’s sugar operations, which grew 44 per cent in the period, reflecting additional sales from the April 2009 acquisition of Azucarera. However, even without these additional sales, sugar revenues were up 16 percent in the 16 week period.
ABF’s UK business produced 1.3m tonnes of sugar, which benefited from a squeezed market.
“Market supply has been tight during the period and prices have held up well. Profit benefited from these higher prices and volumes, together with better factory efficiencies, lower energy costs and a strong euro,” said ABF in its interim statement.
The firm’s sugar operations in other regions around the world were generally reported to have performed “in line with expectations”, although weather conditions in some countries has impacted beet crop, which could be reflected in full year performance, said ABF.
Expanded capacity in Zambia is on target, as is the firm’s planned Swaziland expansion project.
Revenues from ABF’s ingredient division, which accounts for around 10 per cent of overall group sales, were 8 per cent up in the quarter, boosted by the weakness of the sterling.
“The yeast and bakery ingredients business continued to trade well with a strong sales performance in Latin America and from its bakery ingredients products generally,” said the firm.
ABF Ingredients’ yeast extracts and enzymes business also performed well, and the commissioning of a new yeast and yeast extract plant in Harbin, China is underway, said the firm.