Improved profits from corn syrup supplier
US maker of corn syrups sweeteners, saw profits and sales rise for
the year, citing sales in North America and a better price-product
mix as key factors responsible for the rise in figures.
Sales for 2003 came in at $2.1 billion, up from $1.9 billion for the previous year giving a nearly 20 per cent rise on profit to $76.4 million, up from $63.4 million in 2002.
'We continue to benefit from our working capital initiative, generating significant cash flow and using our increased cash from operations to grow our business, increase our dividend and pay down debt,' said Sam Scott, CEO of the US company that saw sales breaking the $2billion barrier for the first time.
Companies supplying high fructose corn syrup (HFCS) in Mexico - including Corn Products International - have felt the financial impact of the 20 per cent 'discretionary tax' imposed by the Mexican government on high fructose corn syrup (HFCS), an ingredient used to sweeten soft drinks. But despite the tax, the company reported that earnings rose in Mexico, adding that it 'continues to support the ongoing bilateral trade negotiations between the United States and Mexico to resolve the HFCS issue.'
Gaining back ground, in North America sales rose by 9 per cent to $1.3 billion, up from $1.2 billion 'driven principally by price/product mix improvement'. In South America there were signs that economic volatility could be settling with sales rising by more than 23 per cent to $495 million, up from $401 million, on the back of considerable gains in Brazil.
The outlook for 2004 remains less certain with the company reporting that contracts have yet to be finalised, mean that prices are not yet fixed. In the current climate where the price of corn rising, it is likely that margins could be reduced in 2004.