AB Foods reports 10% plunge in H1 profit as sugar business loss weighs on results 

UK – Associated British Foods Plc (AB Foods) reported a 10% decline in adjusted operating profit to £818 million (US$930.3M) for the first half of its financial year, primarily due to significant losses in its sugar business.  

Group revenue fell 2.3% year-on-year to £9.5 billion (US$10.8B) for the six months ending 1 March 2025, despite a 1% sales increase at its Primark retail division, which reached £4.5 billion (US$5.1B). 

The company stated that overall performance was solid in its Retail and Ingredients segments but was offset by underperformance in its Sugar division.  

Sales in the Sugar unit dropped 6% to £1.10 billion (US$1.25B) from £1.17 billion (US$1.33B) a year earlier, or 4% on a constant currency basis. 

Chief Executive Officer George Weston described the group’s overall results as robust but expressed frustration with the sugar segment’s performance.  

“I am frustrated with the results in our Sugar business, but we are clear on what needs to be done by way of operational and regulatory solutions to improve financial performance,” Weston said. 

Persistent low European sugar prices and an operating loss at the UK bioethanol business Vivergo were key factors impacting profitability.  

The company noted additional difficulties in Tanzania due to high import volumes in the prior year, while droughts in South Africa also contributed to the segment’s struggles. 

AB Foods now anticipates an operating loss of up to £40 million (US$45.5M) for the sugar business in the current fiscal year.  

Previously, in November, the company had projected an adjusted operating profit of up to £75 million (US$85.3M) for the segment. The group is currently reviewing strategic options for its Spanish sugar unit, Azucarera, where high operating costs have become a concern. 

In the UK, the bioethanol unit continues to face regulatory challenges. AB Foods reported that regulations are undermining the commercial viability of the Vivergo operation and confirmed ongoing discussions with the UK government to seek regulatory support. 

The company maintained its overall full-year financial outlook, although it expects to face U.S. tariff impacts in the second half.  

In Grocery, performance is projected to reflect stabilisation in its U.S.-focused businesses and an ongoing operating loss at Allied Bakeries, where strategic options are also under evaluation. 

AB Foods said it expects continued growth in its Ingredients segment, particularly in yeast, bakery, and specialty ingredients businesses. 

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