Shares in Associated British Foods fell 3.82% to 1,910 pence after the company warned that the Middle East conflict has pushed up costs for its sugar business, which will dent profits in Europe. ABF said sales from its sugar arm declined 4% in the 16 weeks to 20 June, citing reduced selling prices in Europe and higher imports in South Africa. The company noted that gas costs have risen significantly due to the conflict, and if these dynamics persist, it expects to recognise onerous contracts in the 2026 financial year. ABF maintained its full-year outlook for the rest of the group, which includes grocery brands like Twinings and Patak's, and is proceeding with a planned demerger of its food businesses from Primark by the end of 2027.
Associated British Foods PLCMiddle East conflict raised gas costs for sugar business, denting profits and causing onerous contracts.
Reduced selling prices in Europe and higher imports in South Africa indicate lower sugar prices.