British Sugar has reported a dive in pre-tax profits as part of its half-yearly update, sparking a 5% fall in the share price of its parent company, Associated British Foods.
Turnover at British Sugar slipped 6m to £282m, while profits crashed by nearly a third to £53m on the back of a difficult six months on both the production and the marketing side.
It blamed impending cuts to beet and raw sugar prices that kick in on 1 July this year, as well as rising energy costs and a weaker euro also took their toll on the company’s profit.
EU member states agreed to phase in cuts of 36% in the price of raw sugar and 39% in beet prices.
ABF chief executive, George Weston said: “As expected, British Sugar has experienced price pressure but it is well positioned for the medium term and we remain confident about its prospects.”
The 2005 campaign was hailed as one of the best ever, however, with 1.34m tonnes of sugar produced in the UK and 206,000t in Poland to record productivity.
ABF, which owns brands like Kingsmill, Ryvita and Ovaltine, turned over nearly 10% more than the same period last year at £2.9bn with profits falling 2% to £255m.
Its agriculture division saw revenue fall by nearly £100m this year, after the sale of Allied Grain to Frontier in a joint venture with Cargill. Profit remained level at £8m.