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National Starch acquisition boosts Corn Products sales

By Caroline Scott-Thomas , 22-Feb-2011

Corn Products International’s profits fell in the fourth quarter on charges related to its National Starch acquisition, although sales from the newly acquired business boosted sales growth beyond expectations.

Net sales rose 47 percent from $959m to $1.41bn during the quarter ended December 31, which the company said were largely attributable to higher sales volumes, including $351m of sales associated with the National Starch business. Analysts had expected sales of about $1.1bn.

Chairman, President and Chief Executive Officer Ilene Gordon said: "We're pleased to report strong results for the full year, primarily driven by organic volume growth, lower input costs, higher utilization rates and the impact of owning National Starch for the entire fourth quarter… Looking ahead, we see substantial opportunities to generate further growth from an improving portfolio particularly in specialty products from National Starch as well as ongoing geographic expansion."

North America is Corn Products' largest region by revenue, and sales rose 33 percent there in the fourth quarter, driven largely by the National Starch business. Meanwhile sales increased 23 percent in South America and 119 percent in Asia-Africa. The National Starch acquisition provides Corn Products with a new presence in markets in Europe and Australasia, as well as access to new technologies, and improved scale and capabilities in markets where it already has a presence.

Corn Products International said it would buy National Starch from Dutch chemicals firm AkzoNobel in June 2010 for $1.3bn.

The company reported profit of $52m during the quarter, or 67 cents a share, down from $56.3m, or 74 cents a share, for the prior-year period. Not including charges related to the National Starch deal, the company’s adjusted earnings were $1.05 per share. Corn Products shares have gained 48 percent over the past year.

The company also issued a full-year earnings forecast of $3.60 to $3.90 a share on revenue of $6bn. Analysts polled by Thomson Reuters had projected per-share profit of $3.73 on $5.73 billion in revenue.

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