Ingredion Posts Robust Q2 Results, Due To Favourable Price Mix

Ingredion Incorporated, a global provider of ingredient solutions to the food and beverage manufacturing industry, has announced results for the second quarter of 2023 with reported and adjusted operating income grew 18 per cent and 17 per cent, respectively, compared to the previous year.

According to Ingredion in a statement, the increase was driven by favourable price mix, partially offset by higher raw material and input costs and lower volumes. Its reported and adjusted diluted earnings per share (adjusted EPS) for the same period were US$2.42 and US$2.32, an increase of 14 per cent and nine per cent, respectively. (US$1=RM4.58)

In addition, the company raises its full-year adjusted EPS outlook to be in the range of US$8.80-US$9.40, up from US$8.70-US$9.40.

“Once again, our teams demonstrated an ability to adapt to shifting market dynamics while continuing to drive strong profit growth. The team’s nimbleness to adjust our production to anticipated shifts in customer demand led to robust profit growth and greater cash from operations.

“Our performance this quarter further demonstrated the value of our diversified ingredients portfolio where North America’s strength in core ingredients and EMEA’s strength in specialties led to record second-quarter net sales,” said Ingredion president and chief executive officer, Jim Zallie.

Zallie added that net sales growth of specialty ingredients was driven by price and customer mix, which overall, led total net sales growth for the company, reflecting ongoing demand for healthy and natural ingredients, such as solutions to enable sugar reduction.

“Our updated full-year outlook reflects our confidence to continue to deliver profitable growth this year and execute on our Driving Growth Roadmap, creating long-term value for shareholders,” he concluded.

Among financial highlights were total debt and cash, including short-term investments, at June 30, were US$2.5 billion and US$263 million, respectively, versus US$2.5 billion and US$239 million, respectively, at Dec 31, 2022. Meanwhile, reported net financing costs for the second quarter were US$30 million versus US$17 million for the year-ago period, while capital expenditures, net were US$153 million, up US$16 million from the year-ago period.

In the first half of 2023, the company paid US$95 million in dividends to shareholders and announced a quarterly dividend of US$0.71 per share that was paid on July 25. Ingredion considers return of value to shareholders via cash dividends and share repurchases as part of its capital allocation strategy to support total shareholder return.

Ingredion expects full-year 2023 net sales to be up mid to high single digits reflecting softer volume demand, while reported and adjusted operating income are both expected to be up high double-digits.

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