Ingredion, MGP Ingredients post double-digit growth in Q2 buoyed by increased consumer demand

USA — American multinational food ingredients supplier Ingredion and producer of specialty wheat protein and Starches MGP Ingredients have seen record growth in Q2 sales driven by exceptionally strong consumer demand. 

Ingredion’s quarterly sales for the quarter ended June 30 rose 31% to $1.76 billion mainly driven by particularly strong momentum in North America, the company’s largest business unit. Sales rose 26% to US$1.07 billion while the segment’s operating income rose 48% to US$149 million. 

“North America net sales were up significantly for the quarter when compared to the prior year,” said James Derek Gray, chief financial officer.  

“This was driven by volume recovery from the pandemic impacts on consumer mobility in the same quarter last year, the pass-through of higher corn costs and continued specialty ingredients growth. These increases were partially offset by the cessation of ethanol production at our Cedar Rapids (Iowa) plant.” 

Overall, Ingredion’s net income for the quarter ended June 30 totaled US$178 million, equal to $2.65 per share on the common stock, and a significant jump over the same period of the previous year when the company earned US$66 million.  

Despite the wins seen in Q2, Ingredion’s Q1 dismal performance more than offset any recovery seen in Q2 leading to an H1 loss of US$68 million. 

Regardless, the losses were down substantially from the first half of fiscal 2020 when the company earned $141 million, equal to US$2.10 per share. 

As a result of the rebound in Q2, Ingredion has updated its full-year earnings per share guidance to between US$6.45 and US$6.85 per share. 

MGP Q2 income surges 137%  

Meanwhile, MGP Ingredients, a supplier of premium distilled spirits and producer of specialty wheat proteins and starches, has seen its net income for Q2 soar 137% in the second quarter ended June 30, rising to US$19.99 million up from US$8.43 million recorded in the same period a year ago.   

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This growth was led by the company’s Ingredient Solutions segment where gross profits increased to US$6.4 million up 36% from US$4.7 million achieved in the prior year. 

The company’s net sales also increased, rising 89% to US$174.94 million from US$92.56 million achieved in the second quarter of fiscal 2020. 

“We experienced record results across each of our business segments this quarter, including the solid sales growth of aged whiskey, better-than-anticipated growth for our branded spirits segment, strong sales for our white beverage products as well as record results in both revenue and gross profit for our Ingredient Solutions segment,” David J. Colo, president and chief executive officer, said during a conference call with analysts. 

“We believe our diverse customer base and product offering continue to be aligned with strong consumer trends and remain encouraged by the robust gross margins as a result of our strategy to focus production and sales mix on our highest margin products.” 

Looking ahead to the remainder of fiscal 2021, Brandon M. Gall, vice president of finance and chief financial officer, said MGPI expects full-year sales to be in the range of US$570 million to US$580 million, while adjusted EBITDA is forecast in the range of $105 million to $110 million.  

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