Corn Products reports 85% drop in full year income
The Illinois-based corn refiner and supplier of sweeteners and starches had a particularly difficult first half of the 2009 fiscal year ended December 31. Weaker results during that period contributed heavily to the full year fall in income to $41.1m from $267.2 a year earlier. Full year net sales were down seven percent from $3.94bn in 2008 to $3.67 in 2009, with Corn Processors International (CPI) citing lower sales volumes as well as foreign currency translation as largely responsible for the decline.
However, the company’s full year results stood in contrast with positive Q4 results, which showed a 21 percent increase in net income compared to the same period in 2008.
The company’s chairman, president and CEO Ilene Gordon said: “As the fourth quarter confirms, 2009 was a year of two halves. The first half was marked by soft volumes, higher net corn costs, unfavorable foreign currencies, and the write-off of goodwill in our Korean business. The second half showed marked improvement as we worked through the higher corn costs, foreign currencies turned in our favor and volumes began to recover.”
CPI has also taken a similar strategy to many other commodities-based food ingredients firms during the global recession in terms of making strides toward reducing debt and increasing liquidity. The company has reduced its net debt by $332m over the year.
"Throughout the year we remained focused on execution, managing costs and preserving financial flexibility,” Gordon said. “Our team's efforts are clearly visible in the quarter by quarter earnings improvement and in our balance sheet. During 2009 we generated $586 million in cash flow from operations and applied $332 million to debt repayment. At the same time we maintained our dividend and stayed committed to our future growth by investing $141 million in capital back into the business."
