London, March 29 - British sugar and sweetener group Tate & Lyle Plc said on Wednesday that overall trading had been generally encouraging since its last update in late January, with its sucralose sweetener performing well.
Tate, which makes branded sugars, sweeteners and industrial starches, gave the trading update ahead of the close of its financial year at end-March and annual results on May 25.
The group said its European ingredients business was continuing to suffer from lower sweetener prices due to a glut of competing sugar, but its Americas region performed strongly due to both higher selling prices and volume growth.
Tate's European sugar operations continued to see a decline in earnings due to higher energy costs and lower selling prices caused by excess supply and impending cuts in support prices under the new EU sugar regime.
Tate warned that reform of the EU sugar regime, under which support prices will be slashed 36 percent, will see a "substantial" impairment charge on some of its related assets, currently valued at 750 million pounds ($1.3 billion).
Details will be given at its annual results in late May.
The group's zero-calorie sweetener sucralose performed well, though Tate said manufacturing costs were higher due to increased energy and ingredient costs and expansion-related constraints as it looks to expand its U.S. Alabama plant.
Tate's shares have been buoyed by strong North American trading and good demand for sucralose, but they ran out of steam by January amid worries of sucralose competition and the EU reforms.
The shares closed on Tuesday at 586 pence, valuing the group at nearly 2.9 billion pounds.