Associated British Foods warns sugar profits will decline due to higher costs linked to the Middle East crisis, offsetting stable group outlook.
Associated British Foods (ABF) shares fell after the company reported its sugar business faced rising costs tied to the Middle East conflict, pressuring European profits. The group maintained its full-year outlook for other divisions but acknowledged the sugar unit’s challenges would weigh on earnings.
ABF’s sugar sales declined 4% in the 16 weeks to 20 June, driven by lower European selling prices and delayed tariff adjustments in South Africa. The company noted gas costs surged significantly due to the Middle East crisis, complicating profitability assessments for the 2026/27 crop.
The group warned of potential onerous contracts in the 2026 financial year if current market dynamics persist. ABF reaffirmed its forecast for lower group-wide adjusted operating profit and earnings per share year-on-year.