(Reuters) - British food ingredients maker Tate & Lyle (LON:TATE) said on Thursday full-year earnings growth was likely to be at the lower end of its forecast, hurt by higher energy and transportation costs in its key North American market.
Shares of the company fell almost 2 percent in early trade.
The company, which sells corn syrup and other ingredients to food and drink makers, was forced to raise prices for some of its products recently to offset higher costs related to materials and logistics, and transportation due to substantial truck shortages.
Tate & Lyle, which has been looking to simplify its business and speed up development of its new products, had previously forecast full-year earnings to grow by "mid-single digit" on a percentage basis.
The FTSE-250 company said quarterly pretax profit in constant currency was ahead of last year boosted by volume growth in its food & beverage solutions division and its business that sells sucralose, a low-calorie sweetener.
Volume in sucralose was higher due to an optimisation programme at its facility in Alabama with adjusted operating profit slightly ahead of the comparative period, Tate & Lyle said.
In recent years, Tate has been focussing more on speciality food ingredients such as artificial sweeteners and other products like starch, which carry higher margins than its much larger and more commoditised business of bulk ingredients.
"The market underestimates the scope of Tate's margin potential, which could drive strong upside risk to both earnings and the share price," said Liberum analysts.