Corn Products profits up as it passes on price hikes

By Lorraine Heller

- Last updated on GMT

Related tags: Corn products international, North america

Corn Products International said its first quarter profits more
than doubled on the back of strong sales and successful price
increases.

The firm, which supplies the food industry with starch, sweeteners and other corn-derived ingredients, reported gross profits of $146m for the quarter ended March 31 2007, up 58 percent from $93m last year. Net income rose 114 percent to $50m, while sales were up 24 percent to $762m. The firm's acquisitions of SPI Polyols, Getec and Demsa contributed around $18m to sales. According to Sam Scott, chairman, president and chief executive officer of Corn Products International, all three of the firm's geographic regions - North America, South America and Asia/Africa - contributed to its "excellent performance". ​Performance in North America was particularly strong, with improvement driven by increased pricing. Although corn costs increased significantly, customers were able to absorb a large part of this increase. Scott said the Company has been able to pass through higher corn costs more rapidly than expected in its international markets. "We believe our business models in North America and internationally continue to work well in today's environment of higher, and likely more volatile, corn prices,"​ Scott said. "As always, we have risks related to co-product values, the corn basis and any possible sharp move, up or down, in corn prices during the balance of the year." ​ On the back of its strong first quarter result, Corn Products increased its 2007 outlook , saying it anticipates a 29 to 41 percent increase in diluted EPS in 2007. "Our higher outlook stems from the very strong first-quarter performance by our North American region, which we had already said would be the major profit driver in 2007. We continue to expect improved results in South America and Asia/Africa."

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