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Ingredion reports 2Q EPS decline

Ingredion has reported second quarter 2019 results. Reported and adjusted EPS were $1.56 and $1.66, respectively, compared with $1.57 and $1.66 in the second quarter 2018, respectively.

Year-to-date 2019 reported and adjusted EPS were $3.04 and $3.20, respectively, down from $3.47 of reported EPS and down from $3.60 of adjusted EPS in the year-ago period. 2019 adjusted EPS is expected to be in the range of $6.60-$6.90, reflecting moderate growth in the second half

“During the second quarter, we experienced foreign exchange impacts and rapidly changing raw material markets. Our teams have taken aggressive pricing actions to mitigate foreign exchange impacts. We experienced an increase in the net cost of corn in North America due to continued crop inventory imbalances arising from the U.S./China trade dispute. We are closely monitoring raw material markets and selectively capitalizing on opportunities to partially offset the higher cost of corn,” said Jim Zallie, Ingredion’s president and chief executive officer.

“As a result of the actions we took to accelerate our Cost Smart savings program, we now expect to deliver $30 million to $40 million of 2019 year-end cumulative run-rate savings, an increase from the $24 million to $34 million of savings previously anticipated.”

“Our specialty growth platforms delivered increased net sales in the quarter led primarily by sugar reduction and specialty sweeteners. We are nearing startup of Allulose production at our manufacturing facility in San Juan del Rio, Mexico, which will complement our existing portfolio of specialty sweeteners. In addition, we progressed our plant-based proteins growth strategy and are actively filling our customer pipeline with anticipated sales in the second half of the year. We have also expanded our relationship with Verdient Foods to increase the capacity to produce food-grade, higher-value specialty pulse-based flours and concentrates.”

“We expect modest growth in the second half of the year. However, due to the recent increase in corn costs, our expectation for net corn costs in the second half in North America is higher. Our adjusted EPS guidance for 2019 is now in the range of $6.60-$6.90,” added Zallie.