First half results from German multinational the Südzucker Group show a rise in profitability at its bioethanol unit, CropEnergies – which includes the UK’s Ensus wheat to bioethanol plant – despite a sharp decrease in sales.
The Group operating profit rose to €129 million on revenues of €3.35 billion in the six months to August 31st 2020, compared to €74m and €3.31bn in H1 of the previous year.
CropEnergies returned an operating profit of €51m on sales of €373m, from the prior first half’s €44m and €405m. There was a steep drop in ethanol prices at the beginning of the period as fuel demand collapsed due to coronavirus restrictions.
However, these revenues recovered sharply by the end of the half, when they were at a record high, partially offsetting the lower volume and reduced co-product revenues. The recovery in ethanol revenues also helped lift profitability, helped by lower raw material costs.
Südzucker’s Sugar segment also saw sales volumes reduced due to the pandemic. It reduced its operating loss to €-56m (€-93m) while revenues were little changed at €1.11bn (€1.12bn.) Higher prices outweighed lower volumes in line with the reduced beet sugar production in 2019/2020. Covid-19 led to lower demand from the sugar processing industry.
The Group reports a 12% fall in the 2020 beet area to 344,000 ha, following its closure of four sugar factories. It expects below average yields from the 2020 sugar beet crop due to dry spring /summer conditions plus the effects of yellows virus infestation in France, Belgium and parts of Germany.