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