Suedzucker confirms forecast of lower earnings on high costs, low prices

Suedzucker AG

16/05/2024 09:40

HAMBURG, May 16 (Reuters) - Europe's largest sugar
producer Suedzucker  SZUG.DE  on Thursday confirmed it expects
declines in annual earnings largely because of high sugar
production costs and weak sugar prices.
    Suedzucker affirmed an initial forecast made on April 15
that its fiscal 2024/25 group operating profit will fall to
between 500 million and 600 million euros ($544 million to $652
million) from 950 million in the which ended in February.
    Full year operating result in its core sugar segment is
expected to be between 200 and 300 million euros, down from 558
million, it said.
    "For the 2024 (production) campaign, we expect a decrease in
production costs," the company said. "However, the anticipated
decline in sugar prices on average over the fiscal year is
likely to have a negative impact on the result."
    Sugar futures hit 18-month lows on Tuesday on expectations
of high sugar harvests in Brazil.
    "The ongoing war in Ukraine continues to exacerbate the
already high volatility on the sales and procurement markets,"
Suedzucker said. "The future impact of the negative influences
stemming from the EU’s extended duty-free access for
agricultural imports from Ukraine, which is now limited in terms
of volume, remains uncertain."
    "The implications of the war that broke out in the Middle
East last October are likewise difficult to assess."
    ($1 = 0.9200 euros)

 (Reporting by Michael Hogan; editing by Jason Neely)
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