Ingredion “pleased” with 1Q performance

Ingredion has reported results for the first quarter 2015. “We are pleased with the first quarter results which were highlighted by higher volumes and operating income, and earnings per share growth,” said Ilene Gordon, chairman, president and chief executive officer.  “As expected, operating income in North America was up significantly as last year’s results reflected […]

Ingredion has reported results for the first quarter 2015.

“We are pleased with the first quarter results which were highlighted by higher volumes and operating income, and earnings per share growth,” said Ilene Gordon, chairman, president and chief executive officer.  “As expected, operating income in North America was up significantly as last year’s results reflected adverse weather effects, and in the first quarter of 2015 we had strong volumes in core and specialty ingredients and good cost control.  Asia Pacific and EMEA achieved solid operating income for the quarter, in line with our expectations despite foreign exchange headwinds.  These positives were slightly offset by softer demand and foreign exchange headwinds in South America, most predominantly in Brazil.”

“We continue to have confidence in our business model. North America is expected to continue to drive bottom-line growth with stronger volumes and improved product mix.  Asia Pacific and EMEA are anticipated to improve modestly and be in line with last year, respectively, despite continuing foreign exchange headwinds. South America is expected to be generally in line with last year with strong Andean performance expected to offset weakness in Southern Cone and Brazil.”

“Despite economic challenges and slowing economies, our underlying business is doing well.  Our geographic footprint, broad product portfolio, and focus on higher-value specialty products are expected to drive growth and shareholder value.”

“Additionally, we are pleased that the Penford Corporation acquisition closed in March.  The acquisition is still expected to be $0.08-$0.12 per share accretive in 2015 and will enhance our high-value specialty ingredient portfolio. As such, our expectation for adjusted EPS for the year, including accretion resulting from the transaction, is $5.50-$6.00, excluding the associated acquisition and integration costs,” Gordon concluded.

Net sales for the quarter were down 2% to $1,330 million, with a $67m volume increase offset by $77m of adverse currency impact.

First quarter reported operating income and adjusted operating income were $139 million and $157 million, respectively.  This was a 14% and 28%  increase, respectively, compared to $122 million of reported operating income in the first quarter of 2014.  The increase in adjusted operating income was primarily due to stronger volumes and margins in North America. This was slightly offset by global foreign exchange headwinds and stagnant economies in South America, primarily Brazil.

2015 adjusted EPS, including the anticipated $0.08-$0.12 per share accretion resulting from the Penford acquisition but excluding integration and acquisition costs, is expected to be in the range of $5.50 to $6.00 compared to adjusted EPS of $5.20 in 2014.