PureCircle warns on FY EBITDA, net profit

PureCircle Ltd said expects gross margin, EBITDA and net profit to be lower compared to H1 FY16.

Group gross profit for the first half is expected to be US$18m, a decline of 19% against H1 FY16 (US$22m) and EBITDA is expected to be US$8m, a decrease of $5m, reflecting the lower sales and adverse margins. The Group's net loss is expected to be US$2m (1H FY16 profit: US$5m).

It said H1 FY17 has seen continued positive market sentiment for stevia with an ever increasing array of products being launched in the food and beverage categories.

"These launches are not just confined to the traditional mature markets of North America and Western Europe. I am particularly excited to see our expansion in Latin America and South Asia with a new office being opened in India," said CEO Magomet Malsagov.

"The macro market trends continue to develop in our favour with increasing global obesity and diabetes trends well documented. The implementation of sugar taxes in various countries has also added to the momentum of our industry.

"Whilst the US CBP (Customs Border Protection) process has been a major distraction for our business in H1 FY17 and has adversely impacted our sales growth in the United States, I am delighted by the continued growth in sales in the rest of the world, which has further diversified our sales footprint, and by the strong customer support that we continue to receive.

"We have progressed our R&D and leaf development programmes by conducting large scale field trials of new leaf varieties with high content of better tasting novel natural sweeteners Reb M and Reb D. These new leaf plantations are planned to be scaled to thousands of hectares beginning in 2017.

"Our new state of the art, fully automated refinery, encapsulating all the latest technology developments is complete and will be commissioned in the first quarter of CY2017. With these positive dynamics, and an anticipated resolution to the US CBP issue in the near future, I am confident in our mid to long term prospects and look forward to returning to our growth trajectory."