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LONDON, July 24 (Reuters) - British sweetener maker Tate & Lyle said on Thursday it had missed its first quarter target for operating profit due to severe U.S. weather and foreign exchange movements.
The firm, whose brands include zero calorie sweeteners Splenda and Tasteva, said however it expected its overall performance to be broadly in line with previous guidance before the impact of foreign exchange.
The company said the strength of sterling against the dollar and the euro would hit earnings for the full year ending March 2015, if the strength of sterling against the dollar and Euro continued.
Profit excluding currency movements would be “slightly lower” than the previous year, when adjusted operating profit came in at 349 million pounds ($595 million), the company said in May.
Last year’s profits would have been 24 million pounds lower had the company been hit by a similar scale of currency movements.
Volumes of its sweetener Splenda were slightly lower than expected due to a change in a larger customer’s order pattern, the firm said on Thursday.
The company said its speciality food ingredients performed well in emerging markets but overall growth was held back in the United States due to supply constraints.
In February, the food ingredients maker said sucralose prices would be about 15 percent lower in the new fiscal year as an influx of cheaper Chinese rivals forced it to renegotiate contracts at lower prices to maintain market share.
That news helped wipe out nearly a quarter of the firm’s market value, inviting speculation that it could now be a takeover target.
At the same time, the company’s corn syrup business was hurt in the last fiscal year due to an unusually long and bitter winter in the United States that crimped sales of its customers’ soft drinks.
Tate & Lyle plans to replace its chief financial officer, Tim Lodge, next month with an executive from PepsiCo. ($1 = 0.5868 British Pounds) (Reporting By Costas Pitas; editing by Kate Holton and Jon Boyle)