Shares in Tate & Lyle fell 8% on Tuesday after the world's biggest sugar company issued its fourth profits warning in less than a year.

The company blamed higher energy costs and a downturn in its US business for its revised forecasts.

It said higher energy prices would add �40m ($59m) to costs for the year ending 31 March - �10m more than its estimate made in November.

"These energy cost increases coupled with a continued squeeze on margins have lowered our expectations for the current financial year," Tate said in a statement.

Tate shares dropped almost 8% shortly after the market opened but clawed back some of their losses to be 2.8% down at 265p at 1257 GMT.

'Unworkable'

Tate said the sugar business in the US remained "unworkable".

Profits had been squeezed for an unusually long period and the gap between raw and white sugar selling prices had narrowed further in recent weeks.

Analysts said that, like other sugar companies, Tate had struggled to make a profit because raw sugar prices were fixed by government, to support farmers, while refined sugar prices had fallen because of oversupply.

"For anybody to be a success in the US requires a political solution," one analyst said.

Analysts said they were encouraged by Tate's announcement that the planned sale of its Western beet processing division remained on track while it was continuing to "pursue alternatives" for Domino, a cane refining business.

Both units are unprofitable.

'Marked improvement'

Tate said its European and US starch and sweeteners businesses Amylum and Staley would perform better in the next financial year, leading to a "marked improvement in earnings in the year to March 2002".

"We remain confident of achieving our target savings of �50m per annum within three years," Tate added.

In November, the company had reported a 40% decline in first-half pre-tax profit to �68m.

Tate did not specify on Tuesday what it expected to earn in the current financial year.

Analysts said they were now estimating pre-tax profits for the group of about �115m-120m, down from �130m-135m.