IN Brief:
- Reported operating income fell 31% to US$188 million during the quarter.
- Ingredion said the Argo plant had returned to normal production rates.
- Texture and Healthful Solutions recorded its ninth consecutive volume-growth quarter.
Ingredion reported lower second-quarter operating income as disruption at its Argo plant, weaker North American volumes, restructuring, and acquisition-related costs offset continued growth in texture and health-focused ingredients.
Net sales increased 1% year on year to US$1.85 billion. Reported operating income fell 31% to US$188 million, while adjusted operating income declined 5% to US$258 million.
Reported diluted earnings per share were US$1.78, compared with US$2.99 a year earlier. Adjusted diluted earnings per share were US$2.82, against US$2.87 in the second quarter of 2025.
Jim Zallie, Chairman, President, and Chief Executive Officer of Ingredion, said: “We are pleased to say that the plant is operating at normal production rates across all major operating units.”
The Argo facility affected the Food & Industrial Ingredients business in the United States and Canada, where quarterly sales fell 7% to US$488 million. Segment operating income declined by US$28 million to US$58 million, reflecting lower production, softer volumes, and an unfavourable price mix.
Ingredion said reliability improved through the quarter and production had normalised by the end of June. That recovery did not remove the earlier effect on output, customer allocation, inventories, and manufacturing efficiency recorded during the reporting period.
The stronger part of the portfolio was Texture & Healthful Solutions. Sales rose 5% to US$627 million, while segment operating income increased 5% to US$117 million as volume growth outweighed an unfavourable price mix and higher tapioca costs.
The division recorded its ninth consecutive quarter of broad-based volume growth. Ingredion attributed the result to continued demand for its solutions portfolio, including clean-label ingredients, rather than a general recovery across every product group.
The contrast illustrates the different economics inside an ingredients company selling both larger-volume starches and sweeteners and more specialised systems built around texture, nutrition, sugar reduction, and formulation support. Plant reliability carries greater weight in the commodity-facing businesses, while application knowledge and product mix can support margins in specialist categories.
Food & Industrial Ingredients in Latin America generated sales of US$611 million, up 3% with the benefit of currency translation. Segment operating income fell 7% to US$118 million, mainly because of currency effects in Mexico and a more difficult demand environment.
Ingredion is also closing its Cabo facility in Brazil as part of network optimisation. Costs connected with that action, impairment charges, the Argo thermal event, and acquisition work widened the difference between reported and adjusted performance.
The company’s smaller businesses recorded improved results, including continued progress in protein fortification. The group has been building positions in pea protein, stevia, fibres, and other ingredients alongside its established corn, tapioca, potato, and rice processing operations.
The quarter also included the sale of a majority interest in Ingredion’s Pakistan business. Management reaffirmed amended full-year guidance reflecting the reduced contribution from that operation, forecasting reported earnings per share of US$9.15 to US$9.75 and adjusted earnings per share of US$10.30 to US$10.90.
Full-year adjusted operating income is expected to decline by a mid-single-digit percentage. Texture & Healthful Solutions operating income is forecast to increase at a mid-to-high single-digit rate, while the United States and Canadian Food & Industrial Ingredients business is expected to fall by 20% to 25% because of the first-half Argo disruption.
Capital expenditure is expected to reach approximately US$450 million to US$490 million during 2026. The allocation will be closely watched as Ingredion balances reliability work in core processing assets with investment in higher-value ingredients and preparations for a much larger corporate transaction.
Tate & Lyle shareholders accepted Ingredion’s 595 pence-per-share cash offer on 28 July. Completion remains subject to further conditions, but integration planning has begun while existing operations are still recovering from disruption.
The proposed acquisition would expand Ingredion’s position in texturants, sugar reduction, fortification, and multi-ingredient formulation. It would also create a larger manufacturing network that must be integrated without weakening product availability, technical service, or regulatory control.
Second-quarter sales show that demand for specialised texture and health solutions remained resilient. The lower group operating result demonstrates how quickly plant reliability, currency movements, input costs, and restructuring can absorb that growth.
Argo’s return to normal production provides a clearer operating base for the second half. The next results will indicate whether restored output converts into recovered volumes and margins before the proposed Tate & Lyle transaction adds another layer of execution risk.
