Imperial Holly, the American sugar group in which Greencore has a 16 per cent stake, has reported a sharp fall in third quarter profits earnings, with net profits falling from $7.3 million to $5.3 million.
In the nine months to the end of June, Imperial Holly had a loss of just over $12 million compared to nine-month profits of $11.7 million in 1997.
Greencore's stake in Imperial Holly fell from 27 per cent to 16 per cent late last year after the American group issued shares to partly-pay for its £370 million acquisition of another American sugar producer, Savannah Foods. That decision by Greencore to let its stake in the enlarged company fall, seems to have been vindicated, given Imperial's financial performance in the meantime.
Net sales in the third quarter jumped from $198 million to $456 million, reflecting the impact of the Savannah takeover. In the nine months, sales rose from $447 million to $1.3 billion.
Overall, the third quarter represented an improvement on the previous two quarters, but analysts say that the American sugar industry is characterised at present by plant over-capacity and overproduction of sugar beet and sugar cane.
