WESTCHESTER, ILL. — In the second quarter ended June 30, even as Ingredion, Inc. continued to face higher corn costs and unfavorable exchange rates, a 16% increase in net sales was enthusiastically received by Investors. On Aug. 9, shares of the Westchester-based ingredient maker traded as high as $95, a 4.5% jump from the previous day’s close of $90.86.
“Our teams had our best quarter since 2017,” James P. Zallie, president and chief executive, said on a conference call with securities analysts to discuss second-quarter results. “Net sales growth of 16% reflects strong customer demand, which drove comparable volume growth; this, combined with active management of price mix, allowed us to fully offset rising input costs. As a result, our adjusted operating profit increased from last year’s strong performance and exceeded our expectations.
“In terms of customer demand, I want to highlight that on a like-for-like basis, our product shipment volumes are now above pre-pandemic levels for the same quarter in 2019. This is a milestone important to us given the impact the pandemic has had. on the industry and our activities over the past two years. At the same time, net sales increased significantly and specialty ingredients increased as a percentage of volume and net sales, reflecting a higher value mix.
“In response to continued strong demand for Clean Label texturizing starches, we have accelerated the commissioning of new capacity at our Indianapolis plant. Additionally, our sugar reduction and specialty sweeteners platform had another excellent quarter, with net sales growth of more than 20%, driven by double-digit revenue growth from PureCircle’s stevia franchise. »
Net income for the quarter ended June 30 was $142 million, or $2.14 per share on common stock, down 20% from year-ago second quarter earnings of $178 million, or $2.65 per share.
Quarterly sales increased to $2.04 billion, up 16% from $1.76 billion a year earlier.
In North America, the company’s largest business unit, second-quarter operating profit was $161 million, up 8% from $149 million in the same period. 2021. Sales totaled $1.28 billion, an increase of 20% from $1.06 billion.
“Net sales in North America increased 20% over the same period in 2021,” James Derek Gray, executive vice president and chief financial officer, said on the conference call. “The increase was driven by a strong price/mix, primarily due to last fall’s contract season as well as dynamic pricing during the year.”
South America segment operating profit was $39 million in the second quarter, up 18% from $33 million a year earlier. Sales were $290 million, up 8% from $268 million a year ago.
“Also contributing to the second quarter performance, Core Ingredients drove net sales growth in the mid-teens,” Zallie said. “Our volume growth is driven by strong customer demand in categories such as brewery and confectionery. In addition, improved contract terms have allowed us to respond more quickly to changing input costs in our largest markets. Higher net sales growth was led by South America and Mexico, as we continue to focus on fast-growing categories in these territories.
For the six months ended June 30, Ingredion’s net income was $272 million, a sharp increase from net loss of $68 million in the first six months of 2021.
Sales for the six-month period were $3.94 billion, up 17% from $3.38 billion.
For fiscal 2022, Ingredion offered guidance for adjusted earnings per share of between $6.90 and $7.45 per share.
“In the first half, we paid $86 million in dividends to Ingredion shareholders and repurchased $83 million in outstanding common stock,” Gray said. “Finally, we acquired additional shares of PureCircle from minority shareholders for $27 million. We expect our full-year 2022 adjusted EPS to be between $6.90 and $7.45. This excludes the impact of acquisition-related integration and restructuring costs as well as any potential impairment charges.