AB Sugar’s profits fell 15% last year and have continued to come under pressure in the face of lower world sugar prices.
Revenues rose slightly to £2,677m in the year to September 2013, but adjusted operating profit fell from £510m to £435m.
In the first half of this year, sugar revenues were down 22% on 2013 and operating profits were 60% lower, which the company put down to substantially lower prices and volumes in all markets.
The UK business British Sugar produced 1.15m tonnes of sugar last year, 13% less than the previous year. The company estimates production will hit 1.32m tonnes this year, a record since European reform in 2006.
“AB sugar has been severely affected this year by the decline in sugar prices,” said Charles Sinclair, chairman of parent company Associated British Foods.
“The impact in the EU is exacerbated by the intensification of competition ahead of quota abolition in 2017.
“Our sugar operations are well invested with highly efficient and cost-competitive plants, and in Europe are well-placed to succeed in the post-reform environment.”
The group’s agricultural inputs business AB Agri enjoyed a record year, with profits up 11% to £1,410m and adjusted operating profit up 18% to £47m.
The UK feed business AB Connect – which brought together KW, Trident and ABN – saw strong demand for ruminant and poultry feeds, the company said.
Total revenues at Associated British Foods grew 9% to £13.3bn and adjusted operating profit rose 10% to £1,185m, boosted by strong sales growth at retailer Primark and the group’s grocery business.