Relaxing coronavirus lockdowns to help ethanol demand - CropEnergies

CropEnergies AG

13/05/2020 10:52

HAMBURG, May 13 (Reuters) - German bioethanol producer
CropEnergies  CE2G.DE  said on Wednesday demand for bioethanol
is expected to recover as the relaxation of coronavirus
lockdowns in Europe enable more people to use their cars.
    It was not yet possible to forecast to what extent increased
demand for bioethanol for hand sanitizers would offset the
reduced demand for use in vehicle fuels, CEO Joachim Lutz said
in a conference call with journalists. 
    But he expected a normalisation of European fuel markets in
the second half of 2020, from the summer.
    Several European countries, including Germany, have
compulsory blending of bioethanol in gasoline to reduce
pollution, so reduced fuel usage also hits bioethanol demand.
    Demand for bioethanol for blending with gasoline fell in
April and May following lockdowns imposed to curb the spread of
the coronavirus that reduced motoring, Lutz said.
    But there was a strong increase in bioethanol demand for
hand sanitizers and the company re-directed production.
    "An improvement in earnings is expected in the course of the
financial year as restrictions are being eased gradually in more
and more countries," the company said. "This will again
contribute to higher fuel demand."
    CropEnergies, a unit of German sugar producer Suedzucker
 SZUG.DE , said on Wednesday it expected a "significant decline"
in revenues and operating profit in its current 2020/21
financial year that started in March 2020, just as the lockdowns
across Europe reduced car use and so fuel demand.
    Bioethanol prices are starting to recover, Lutz said. Prices
had started 2020 at about 600 euros a cubic metre and fallen to
a low point around 350 euros a cubic metre as countries went
into lockdown. Prices have now recovered to about 500 euros a
cubic metre, he said.
    The company reported net profits of 74.6 million euros in
its 2019/20 financial year, up from 21.3 million euros in the
previous year.
    The company's results in the first quarter of the new
financial year would suffer from the impact of coronavirus, Lutz
said in the conference call. But an overall break-even operating
result in the first quarter of the new financial year was still
possible.

 (Reporting by Michael Hogan; Editing by Alex Richardson)
 ((michael.j.hogan@thomsonreuters.com; +49 172 671 36 54;
Reuters Messaging:
michael.hogan.thomsonreuters.com@reuters.net))