News Sugar
German sugar factories expect better times
The two largest sugar manufacturers in Europe announce better times. Despite the impact of the corona crisis and the tensions around supply and demand worldwide, both Südzucker and Nordzücker see the result increase in the first half of 2020/2021.
Südzucker announces today (Thurs 8 October) that its profit has risen sharply in the first half of the current financial year. This means that the largest sugar producer in Europe is continuing its upward trend previous financial year by means of. Operating profit increased to €2020 million in the first half of 2021/129 (previous year: €74 million). In the same period, turnover showed a slight increase from €3,314 billion to €3,349 billion.
Loss in sugar segment decreases
According to Südzucker, the improved operating result is partly due to the decrease in the loss in the sugar segment. Last year the counter was still at minus €93 million, this year it is minus €56 million. This is mainly due to the higher sugar prices since the start of the 2019/2020 marketing year. These more than compensated for lower sales volumes and higher production costs. Turnover remained more or less the same at €1,1 billion.
At the start of the current financial year, which coincided with the coronavirus outbreak, there was still hoarding behavior in retail. These positive effects were later offset by lower demand from the sugar processing industry due to measures to contain the corona pandemic. Another effect of the corona crisis was lower demand for ethanol, as a result of which Südzucker saw the revenue of the CropEnergies segment fall. There is now a strong recovery.
Less sugar beets
The beet acreage of the Südzucker Group has decreased by approximately 2020% in 12: from 391.000 hectares to 344.000 hectares. This is the result of the closure of 4 sugar factories. In addition, the company is counting on a beet yield that is slightly below average.
Nevertheless, Südzucker is counting on a slight improvement in the yield of the sugar branch. At the end of the current fiscal year, the company still expects to reach total revenues between €6,9 and €7,2 billion, comparable to last fiscal year. Operating profit is estimated at €300 to €400 million.
Nordzucker optimistic too
Nordzucker also expects to close the current financial year with a good profit. Europe's second-largest sugar factory has seen prices fall globally following the outbreak of the coronavirus pandemic, causing oil prices to fall, sugar production in Brazil to rise and global demand to decline. Nevertheless, the company notes that the situation in Europe is relatively stable, so that only a small decrease in turnover is expected at the end of the 1/2020 financial year.
“This is also due to our measures to reduce costs throughout the Nordzucker Group,” emphasizes CEO Lars Gorissen. "This provides more stability in volatile markets." Gorissen expressed his expectations during the Annual General Meeting that took place digitally on 7 October. It provided accountability for 2019/2020. As previously reported, this financial year was closed with a loss of €15 million† This was significantly lower than the previous year (minus €36 million) and than initially expected.
Jeanette Pennings
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