Corn Products posts strong Q2 results
a surge in second quarter profit and sales, boosted by higher
selling prices and improved product mix.
Net income for the quarter ended June 30 2007 shot up 68 percent to reach $51m, compared to $30m last year. 'Record' quarter net sales improved 33 percent to $857m, compared to $645m in the prior-year period. According to Corn Products International, the higher sales were primarily the result of improved price and product mix, along with favorable volumes and foreign currency translations. The acquisitions of SPI Polyols, Getec and DEMSA also contributed approximately $29m of net sales in the second quarter. The company revealed a strong performance in all business regions: in North America sales increased 34 percent to $534m; in South America, sales were up 40 percent to $218m; and in Asia and Africa sales rose 15 percent to reach $105m. "Our North American region should remain the major profit driver for the rest of 2007, along with a solid improvement from South America," said Sam Scott, president, chairman and chief executive officer of Corn Products International. "We anticipate flat profitability in Asia/Africa due to a weaker performance in South Korea which is impacting operating income growth in the region." He added that the Company expects to exceed its annual net sales goal of $3bn in 2007. The company said it has increased its 2007 capital spending plan to $200m from $145m in view of "new and attractive growth projects". These include polyol investments in the US, Mexico and Brazil to support recent acquisitions, new modified starch capacity in Mexico, and a new plant investment in Pakistan. "Our original 2007 capital spending plan (…) includes product channel expansions in such countries as Argentina, Colombia, Mexico, Pakistan and Thailand," said Scott. "Our record capital expenditures program this year supports several of our Pathway Strategy steps to drive organic growth in our base business and broaden our value-added product portfolio."