British sugar refiner and sweetener group Tate & Lyle reiterated first-half pretax profits would be lower, due to a fall in commodity prices and a higher interest charge, pushing its shares lower today.
The London-based group said it was no longer benefiting from the high prices seen for some of its products, such as corn gluten, oil and meal, in 2008, while ethanol profits in the United States would also be lower due to the falling price of oil.
"As we indicated in July, our half-year results will not reach the level of the corresponding period which benefited from strong co-product revenues during the commodity price peaks of the summer 2008," said chief executive Iain Ferguson in a trading update statement.
Tate's shares dipped 1 percent to 411 pence by 0730 GMT as most analysts said the trading statement was much as expected. The shares have risen from a year low of 242p in March on hopes for recovery and the arrival of a new chief executive.
With no obvious catalyst in this statement, we would not be surprised to see some profit-taking ahead of a clearer view of where Javed Ahmed plans to take the business," said analyst Julian Hardwick at brokers RBS.
Former Reckitt Benckiser executive Mr Ahmed will take over as chief executive from Ferguson next week, on October 1st.
Mr Ferguson said, however, that he was encouraged by the group's overall trading in the current financial year to March 2010, although a number of its markets remain challenging.
The group said half-year operating profits would be flat after the benefit of exchange rate translations, but pretax profit would be lower due to a higher interest charge steming from a higher pension charge and delays to completing its Fort Dodge corn milling plant.
It was giving a trading statement ahead of the end of its half year to September 30th. Its interim results are due on November 6th.
Reuters