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Südzucker: significant decline in the sugar segment

January 14, 2020 at 10:29 AM , Der AUDITOR
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MANNHEIM. Südzucker presents its current forecasts for the 2019/2020 fiscal year. The sugar segment is weakening noticeably, but the CropEnergies and special products segments are scoring revenue growth.

Südzucker AG's consolidated operating profit of EUR 113 million after the first three quarters of the 2019/2020 fiscal year (1 March 2019 to 30 November 2019) was only slightly below last year's level of EUR 116 million. In total, consolidated revenue for the first three quarters was EUR 5,028 million, compared with EUR 5,192 million last year. Group EBITDA is EUR 373 million, which is significantly higher than the last fiscal year's EUR 345 million.

Prices are slowly recovering

Südzucker attributes the noticeable decline in the sugar segment from EUR 2,060 million last year to EUR 1,739 million in the current fiscal year to a low price level in the EU sugar market as well as to less available supplies due to the weak crops in 2018 and 2019. Although prices have been rising again since October 2019, this is offset by higher production prices due to more expensive sugar beet. Nevertheless, the operating loss in the third quarter of 2019/2020 of EUR -54 million more than EUR 30 million below last year's loss of EUR -85 million. According to estimates, the Südzucker Group will produce 4.3 million mt of sugar from 28.4 million mt sugar beets in the current processing campaign. 

Increase in sales

The special products segment continues to grow, with revenues rising to EUR 1,796 million. Sales volumes increased, especially for starch and trial products, and ethanol revenues are also significantly higher. The operating result reached EUR 143 million compared with EUR 118 million last year. In the CropEnergies segment an increase of more than EUR 70 million was recorded, so that a total of EUR 604 million can be reported. Revenue in the fruit segment of EUR 889 million was similar to last year's level.

New estimates

The updated forecast for the 2019/2020 fiscal year is for consolidated revenue of EUR 6.7 to 7 billion, which is similar to last year's level of EUR 6.8 billion. In the sugar segment a significant decline in revenues is expected, which should be offset by revenue increases at CropEnergies and special products. Group operating profit is currently estimated at between EUR 70 and 130 million, a slight increase on the previously estimated EUR 50 to 130 million.

Press release Südzucker AG (14 January 2019)
Photo: Wilhelm Dürr

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