Food Business News - June 21, 2011 - (Page 14)

Sugar bull Analyst rates Imperial Sugar a ‘buy’, sees host of positives slowing the earnings ramp.” Elaborating on the discussion of Imperial joint ventures, Mr. Pinheiro expressed disappointment the company did not exercise its option to acquire the 50% of Wholesome Sweeteners it does not currently own. Based in Sugar Land, the company is half owned by a European partner. The company, established in 2001, markets organic natural, unrefined sweeteners to the North American market. Mr. Pinheiro said the decision not to buy the remaining half of Wholesome is “not the end of the story.” “Imperial is still able to negotiate with its j.v. partner (Edward Billington & Son, Ltd.). and we get the sense that Imperial will ultimately purchase the remaining 50%,” he said. “Wholesome PHILADELPHIA — A more is projected to have net hopeful view of near-term sales of $117 million and earnings prospects for Imperial operating profit of $18 Sugar Co. was at the center million in fiscal 2011.” of a range of positive signs Meanwhile, Mr. Pinheiro prompting Mitchell Pinheiro, sees Imperial’s other joint — Mitchell Pinheiro, an analyst for Montgomery Janney Scott L.L.C. an analyst for Montgomery venture as positioning it Janney Scott L.L.C., to upgrade well in the rapidly emerging the company to a buy from a stevia market. neutral rating. “Looking out two years, Imperial’s “Natural Sweet Ventures, a 50/50 Reflecting the upgrade, Mr. Pinheiro strategic partnerships aimed at growing joint venture formed in February 2010 has raised his fair market estimate for downstream profitability (Louisiana with Pure Circle Ltd., is developing Imperial’s share to $30 per share from Sugar Refining), presence in the higher- and commercializing sugar/stevia $16. The higher level is based on a margin organic and natural segment sweetener blends for sale in the NAFTA multiple of 10 times what Mr. Pinheiro (Wholesome Sweeteners), and value- region,” Mr. Pinheiro said. foresees as “new normalized” earnings, added natural offerings (Natural Sweet He said the venture’s products anticipated by 2013 or sooner. Ventures) could provide meaningful will have a cost advantage because The earnings per share forecast earnings upside as they gain traction,” it will not need to separate the of $3 per year represents a dramatic Mr. Pinheiro said. “While Imperial glycoside sugars (a large class of sugar turnaround for Imperial Sugar, based outperformed expectations in the most derivatives in which sugar is combined in Sugar Land, Texas. The company recent quarter, the lack of visibility in with a non-sugar). sustained large losses in 2009 and the sugar refining business impairs “Product development is focused 2010 and is expected by Mr. Pinheiro our ability, to some extent, to predict on delivering desired sweetness levels to be only slightly profitable in 2011. earnings on a short-term basis. We with reduced calories using all natural He forecasts earnings per share of prefer to look at potential earnings ingredients, in-line with Imperial’s $1.82 in fiscal year 2012 (year ending power and how fast the company strategy to expand into value-added September), and $3.13 in 2013. can achieve this run rate. With the natural offerings,” Mr. Pinheiro said. Fueling Mr. Pinheiro’s optimism is momentum in the business improving, “Samples of Steviacane (trademark the wide spread between bulk and raw and with investor sentiment likely for product family) were provided sugar prices, margins he said should to turn more positive as near-term to large industrial baking, cereal and remain wide for the next several earnings performance boosts the beverage companies. Management quarters. Longer term, he expects the prospects of achieving normalized remains encouraged by preliminary margins to narrow but not to historical earnings power, we believe now is results, and noted that the project levels. the time to own the stock. We view has evolved from the conversational Also key to his outlook is Mr. Pinheiro’s prevailing spreads as the primary stage with customers to the product belief that Imperial’s Port Wentworth, risk to our $3 per share of earnings development support stage; it further Ga., refinery is gradually working back power. In the near term the prospects commented that it expects initial to historical levels of production from of firming refined sugar prices remain industrial sales of the product to depressed levels that had been an high, but a larger-than-expected beet commence toward the end of calendar earnings drag the last three years. sugar crop could contract the spread, 2011.” FBN L Looking out two years, Imperial’s strategic partnerships ... could provide meaningful earnings upside as they gain traction. 14 FOODBUSINESS NEWS ® June 21, 2011

Table of Contents for the Digital Edition of Food Business News - June 21, 2011

Food Business News - June 21, 2011
C.D.C. report fi nds increase in salmonella infections
General Mills sees ‘robust’ growth opportunities in global yogurt category
Following Jimmy
Web Contents
Editorial - German E.coli outbreak underscores need to fund F.S.M.A.
ConAgra acquires Marie Callender’s trademarks
Kraft investing to eradicate malnutrition
Perkins & Marie Callender’s fi les for bankruptcy
Snack food sales reach $64 billion in 2010, may top $77 billion by 2015
Recession seen triggering sharp drop in food product introductions
Cargill opens Latin American innovation center
John Bilbrey to helm at Hershey
ICL Performance to acquire Cosmocel Quimica
Sugar bull
Smithfield terminates Campofrio bid
Omega-3 food, beverage market grows 11%
Roark Capital ups presence in food industry
Calavo earnings decline due to higher costs
Mountaire Farms acquiring bankrupt poultry company
Diamond Foods returns to profi tability in third quarter
Nestle water efforts recognized
C.D.C. report points to increase in salmonella infections
Consumers await full impact of higher food prices
A difficult disappearing act
Innovation honored by the I.F.T.
Mintel: Functional foods ‘on life support’
Allergen labeling guidance needed
Creating a defi nition of sustainable nutrition
German E. coli outbreak may lead to changes
Chronic inflammation: The next opportunity?
ConAgra Mills unveils food safety system for flour
Finding fiber everywhere
Spicy fl avors moving beyond heat
Dairy Business News
Commission clears Lactalis acquisition of Parmalat
New texture system replaces milk fat in dairy products
Researchers target sodium redution in cheese
General Mills sees ‘robust’ growth opportunities in global yogurt category
Saputo fiscal year earnings rise 18%
New Danisco system targets artisan ice cream
Researchers target sodium reduction in cheese
Single-serve licensing
Quiznos adds three concepts to menu
Flax USA introduces Flaxmilk
Johnsonville Sausage adds chicken varieties
General Mills adds brownies to Fiber One line
Farley’s & Sathers updates Tree Top line
Ingredient Market Trends
Senate vote to end ethanol support seen as symbolic
Ingredient Markets
New container may hold two compatible products
Solbar names president of U.S. business
Sensient launches naturally-sourced colors in dry state
Comax develops fl avors for energy drinks
Puratos launches bake-stable chocolate fi llings
DSM completes U.S. innovation center
Sea salt assists in sodium reduction
Ad Index
Food Business in the News

Food Business News - June 21, 2011