Suedzucker confirms 90% quarterly profit surge as sugar sector recovers
HAMBURG (Reuters) -Suedzucker, Europe’s largest sugar producer, confirmed a jump of about 90% in third-quarter operating profit on Thursday as improved sugar markets boosted earnings.
Operating profit in the three months to Nov. 30 rose to 127 million euros ($145.30 million) while sales increased 17.4% to 2.04 billion euros. The company made an advance release of earnings on Dec. 15.
The company repeated its December forecast of full-year group operating profit of between 320 million and 380 million euros, up from the previous year’s 236 million.
Suedzucker, whose operations range from pizza and processed foods to food ingredients and bioethanol, said its sugar business swung to a quarterly operating profit of about 10 million euros from a 28 million euro loss in the same period last year.
“With a further deficit in the world sugar balance in the 2021/22 marketing year, the world market environment is expected to remain positive,” Suedzucker said.
Sugar futures hit 4-1/2-year highs in October with high energy prices generating more demand for sugar-based ethanol fuel amid tightening global sugar supplies, although prices pulled back from peaks in January.
The EU is expected to produce more sugar this season if beet yields normalise but Europe is still expected to need extra supplies, Suedzucker said.
The company expects to produce 4.2 million tonnes of sugar this season, up from 3.5 million tonnes last year.
“Since the EU will remain a net importer in the 2021/22 sugar marketing year, Suedzucker will enjoy a positive market environment,” it said.
Since October 2021, Suedzucker’s sugar business has benefited from rising sales revenues and cost savings from a recent corporate restructuring programme which saw several factory closures.
This will be offset by significantly higher energy and packaging material costs and additional charges could arise from the fourth coronavirus wave, it said.
(Reporting by Michael Hogan, editing by Miranda Murray and Subhranshu Sahu)