Suedzucker's Q1 earnings slump on high costs, low sugar prices (updated)

Suedzucker AG

11/07/2024 06:50

(Adds details on earnings, forecast)
       HAMBURG, July 11 (Reuters) - Europe's biggest sugar
producer Suedzucker  SZUG.DE  on Thursday posted a 45% fall in
first-quarter earnings, hit by higher costs and lower sugar
prices.
    The German company reported operating profit of 155 million
euros ($167.9 million) for the quarter ended May 31, compared to
282 million euros in the year-ago quarter.
    The sugar, CropEnergies biofuel and starch segments all
recorded a decline in earnings, it said.
    Suedzucker had warned in April that high costs ranging from
energy, raw materials, logistics to packaging combined with weak
sugar markets would cause a fall in earnings for the first
quarter.
    The company warned on Wednesday that its second quarter
earnings would decline, without providing concrete numbers.
    Sugar futures hit 18-month lows in May on expectations of
large sugar harvests in Brazil but have since recovered
slightly.
    Suedzucker's sugar revenues rose 16.5% 1,076 billion euros
despite falling prices, with "substantially higher" exports from
the EU to global markets a major factor, it said.
    The company also affirmed its previous forecast that
full-year group operating profit would fall to between 500
million and 600 million euros from 947 million in the previous
fiscal year, which ended in February.
    It forecast full-year sugar sector operating profit would
fall to between 200 and 300 million euros from 558 million last
year burdened by rising costs and expected low prices.
    Suedzucker said results still depended market volatility
caused by the war in Ukraine. The EU gave Ukrainian agricultural
products, including sugar, duty-free access to the EU market and
although volumes have been restricted, the impact on markets
remains uncertain, it said.
    The group's sugar beet cultivation area will increase
“moderately” for the autumn/winter 2024 harvest compared to the
previous year, it said, with an average harvest expected
overall.

 (Reporting by Michael Hogan, editing by Rachel More and Varun H
K)
 ((michael.j.hogan@thomsonreuters.com; +49 172 671 36 54;
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