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Südzucker issues warning for 2018/19

May 18, 2018 at 11:08 AM , Der AUDITOR
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MANNHEIM. The German Südzucker AG has published its annual report for 2017/18. Although the consolidated group operating results exceed expectations, the historically low sugar prices are a major cause of concern.

 

Consolidated group operating results better than expected

Revenues in the segments of sugar, special products and CropEnergies increased in 2017/18, whereas revenues in the fruit segment remained stable. This resulted in a 7.8% increase of the consolidated group revenues, which amounted to EUR 7 billion in the fiscal year 2017/18 and is in line with previous expectations.

Contrary to this, the consolidated group operating results reached EUR 445 million. They rank nominally higher to the previously expected figure of EUR 440 million. In this case, the sugar and fruit segments contributed to the rise. As expected the CropEnergies and special products segments did not reach last year’s high numbers.

Tables about to turn for sugar

The sugar segment saw a rise in revenues to EUR 3,017 million. Operating results, in addition, increased to EUR 139 million. Although these figures bespeak of a successful year, there is great cause for concern in 2018/19. The abolition of the sugar quota system caused a drop in sales revenues in the second half year. Sales revenues have been declining since October 2017. Lower production costs and the higher sales volumes will hardly be able to compensate for these loses. The market is governed by uncertainty.

In 2018/19, Südzucker envisages consolidated group revenues of EUR 6.8-7.1 billion. Consolidated group operating results are, however, expected to drop to EUR 100-200 million. A loss of EUR 100-200 is expected in the sugar segment.

Sugar output increase in 2017

Due to an increase in acreage, well-above average sugar beet yields and a larger sugar beet crop sugar production has risen to 5.9 million mt in 2017. Südzucker processed a total of 36 million mt of sugar beets and the campaign lasted an average of 133 days, which is well above previous expectations of 120 days.

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