Profit before tax fell 6% to £1.034bn at Associated British Foods, whose business includes sugar, agriculture, grocery and retail interests.
The group’s results for the year to 12 September 2015 were described by chief executive George Weston as a strong performance, despite the challenges of food commodity deflation and large movements in exchange rates.
Food commodity price deflation was the main reason that revenue fell in ABF’s food businesses and was also the cause of a big drop in profit at AB Sugar.
See also: BP sells Vivergo fuels stake to ABF
This is the third consecutive year that profits have fallen at AB Sugar. EU prices had now stabilised, said Mr Weston and the steps the company had taken to reduce its cost base were aimed at creating a profitable business at these price levels and in a post-quota environment in the EU.
During the year the group made capital investments of £613m while net debt fell £252m to £194m.
It also bought BP’s 47% stake in Vivergo Fuels, taking its share in the UK bioethanol producer to 94%. Through Frontier Agriculture, its joint venture with Cargill, and selling the feed co-product through AB Connect, ABF has a significant interest in this supply chain.