Germany’s Nordzucker profits rise sharply, warns on harder new year

Suedzucker AG

23/05/2024 12:55

HAMBURG, May 23 (Reuters) - Germany's second largest
sugar refiner Nordzucker reported a 79% surge in annual profits
on Thursday as it benefited from high sugar prices in the last
year, but cautioned a falling market could pressure results in
the new year.
   Non-listed Nordzucker posted a 326 million euro ($353.5
million) net profit for its 2023/24 financial year to
end-February, against 182 million euros in the previous year.
This made it the second-best year in the company’s history. 
    Nordzucker's Australian subsidiary Mackay Sugar contributed
27 million euros to operating profits. Group sales rose 29.3% to
2.9 billion euros. 
    "The main reason for this is a higher price level for sugar
compared to the previous year, which more than compensated for
the significant cost increases for raw materials and energy
supply, as well as in logistics," the company said in a
statement at a press conference to present its results.
    "However, another record year is not to be expected in view
of declining prices and volatile markets," it said. "We
currently do not expect results at this level to be achievable
in the coming years." 
    There are signs that sugar prices might fall, it said,
citing increasing production capacity in the EU and imports from
Ukraine among other factors. "World market prices for sugar are
expected to decline," it added.
    Sugar futures hit 18-month lows in May on expectations of
high sugar harvests in Brazil.
    Europe's and Germany's largest sugar producer Suedzucker
 SZUG.DE  said on May 16 it expected lower annual earnings in
its new year largely because of high production costs and weak
sugar prices.
    Nordzucker expects earnings before interest and taxes (EBIT)
in its new 2024/25 financial year of more than 200 million
euros, down from 421 million euros in 2023/24.
    ($1 = 0.9222 euros)

 (Reporting by Michael Hogan; Editing by Jan Harvey)
 ((michael.j.hogan@thomsonreuters.com; +49 172 671 36 54;
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