A slump in AB Sugar’s profit weighed down its parent company’s (Associated British Food) overall profit over the last 12 months.
In its latest trading update for the first half of fiscal 2019, Associated British Foods reported flat first-half earnings on 24th April, reflecting a near wiping out of profit from its sugar operation.
The company’s operating profits at the sugar business has more than halved this year, falling 51% from £249 million to £123 million largely due to the volatility in the market place with the EU sugar industry having to compete in the global market which has been awash with sugar and prices depressed for some time.
In its trading update on 5th July covering the nine months to the end of June from the same period last year, Associated British Foods said that its group revenues would have grown by 6% had it not been weighed down by drop in revenues from its sugar business, checking the overall growth in revenues to 3%.
Associated British Foods (ABF) is rumoured to have sold its cane sugar business in China to a consortium led by Nanning Sugar Industry Co Ltd, reports Reuters.
ABF has invited bids for the factories. AB Sugar unit’s China business, which was established in 1995 via a joint venture, has five cane sugar mills in southern China and two sugar beet factories in the north-east of the country.
ABF said pretax profit fell to £717 million ($1.11 billion) in the 52 weeks ended Sept. 12 from £1.02 billion in the previous fiscal year, on a 1.1% decline in revenue to £12.80 billion. AB Sugar’s operating profit declined from £189 million in 2014 to £43 million in 2015.