Tate & Lyle's full year profit fell by 79 per cent to £ 42m due largely to reform of the European sugar market.
The UK based ingredients giant registered a £ 272m impairment charge on its European assets due to the upheavals.
However underlying profit rose 16 per cent to £ 295m due to high world sugar prices and the continued strong demand for Splenda, its sucralose product.
"These results have been achieved despite absorbing significantly increased energy costs across the business," said chairman David Lees as he presented the results for year-end to 31 March 2006.
"In addition, our European operations were adversely affected by an oversupply of sugar in the EU market and other factors arising from the reform of the EU sugar regime.
"In our announcement of 29 March 2006 we stated that we would be reviewing the carrying value of those of our European assets affected by changes to the EU sugar regime.
"The outcome of this review is the principal element of the total impairment charge of £ 272 million, the details of which are set out in the Operating and Financial Review."
The group has been making a conscious attempt to diversify its operations away from sugar. Tate & Lyle's emphasis is now very much on value-added products.
"Our strategy to grow the profit contribution from value added products continues to be successful and we have set as our target for the current year an increase in profit contribution of 30 per cent from this activity," said Lees.
"In part our target derives from the exciting prospect of new value added product facilities (including capacity for Splenda sucralose) being completed and commissioned during the year to March 2007."
The company is highly protective of its Splenda product, which has enjoyed continual growth. This month in fact the company filed a suit in the US over an alleged infringement of its patented sucralose manufacturing technology.
The group's US subsidiary, Tate & Lyle Sucralose, filed the suit last week in the US District Federal Court for Central Illinois against a Chinese manufacturing group based in Hebei province as well as six importers of sucralose into the US.
The proceedings allege infringement of patented sucralose manufacturing technology in respect of sucralose manufactured in China.
Tate & Lyle is listed on the London Stock Exchange. In the US its ADRs trade under TATYY. The company operates more than 60 production facilities in 28 countries, throughout Europe, the Americas and South East Asia.
It employs 6,700 people in its subsidiaries with a further 4,500 employed in joint ventures. Sales in the year to 31 March 2005 totalled £ 3.3 billion.