European crop processor Südzucker has reported a sharp fall in full year profitability on lower revenues, as previously forecast. The Group blames the decline on difficult trading for its CropEnergies bioethanol and Sugar divisions.
The Group made an operating profit of €27 million on revenues of €6.75 billion in the year ended February 28th 2019, compared to €445m and €6.98bn in the previous twelve months.
CropEnergies made an operating profit of €33m on sales of €693m (€72m and €808m in 2017/18), following a decline in both production and sales volumes. “Challenging market conditions” led to the decision to reduce output by closing the Ensus plant on Teesside from December 2018 to the end of February this year. Costs also rose.
However, the Group says that Crop Energies’ profitability and revenues had recovered in the final quarter. For the current financial year, the Group is foreasting a CropEnergies profit of between €20 – €70m on revenues of €720 – €820m.
Südzucker’s Sugar division made a loss of €239m on sales of €2.58bn, down from the prior year’s profit of €139m on sales of €3.02bn. Most losses occurred in the second half, with lower sugar volumes after the very dry 2018 summer reduced beet yields and affected domestic and export sales volumes. Sugar production dropped to 4.7m tonnes from the 5.9m tonnes in 2017/18.
Looking ahead, the group predicts a Sugar division loss in the current year of €0 – €100m, with revenues also dropping “moderately”.