Explosion costs impact on Imperial Sugar’s full year results

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Sugar

The rebuilding of Imperial Sugar’s Port Wentworth refinery following an explosion in February is expected to total $200m-$220m, taking its toll on the company’s full year results, despite stronger sugar prices.

The facility is now in the process of being rebuilt after the explosion killed 14 and injured more than 40.

The Imperial Sugar Company has reported a net loss from continuing operations of $21.2m for the 2008 fiscal year, compared to $43.6m last year.

Imperial Sugar remains upbeat for the year ahead, however, on stronger sugar prices as global supply has tightened, and in expectation of the new Port Wentworth refinery’s completion.

President and CEO of Imperial Sugar John Sheptor said: “We are encouraged by recent improvements in sugar prices as we enter the new year...while fiscal 2008 was a challenging period due to unforeseen events, we expect that our Port Wentworth rebuild and refocus on various business initiatives will bring improved future results.”

At the Port Wentworth refinery, ‘limited’ production of liquid sugar and some specialty sugars recommenced in the autumn, the company said. It also reported that it expects to be producing bulk granulated sugar there from early 2009, with its packaging facilities restored by next autumn.

Net sales for the year stood at $592.4m compared to $875.6m in 2007.

For the fourth quarter of the fiscal year, the company posted a net loss from continuing operations of $5.4m, compared to an income of $7.8m a year ago.

Although it has been suggested that sugar prices could drop with the price of oil due to the production of sugar cane-based ethanol for fuel, they have so far resisted the trend.

Sheptor added: “Our liquidity, lack of debt and capital resource position strengthens our ability to effectively manage our business through industry cycles.”

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