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Südzucker with weak sugar business – CropEnergies reaffirms outlook

In times of the corona crisis, the food industry is one of the winners of the pandemic. Südzucker also benefits from this, although the sugar business of Europe’s largest sugar producer is showing weaknesses. At the listed subsidiary CropEnergies there was a significant jump in earnings with a simultaneous decline in revenues. The ethanol specialist gives reasons – and confirms the forecasts for the overall financial year 2020/2021.

First things first about Südzucker and CropEnergies:

  • Südzucker confirms annual targets
  • Demand for ethanol strengthens CropEnergies

Südzucker’s business figures are impressive in the first half of the 2020/2021 financial year. Europe’s largest sugar producer reported almost stable sales and, on the earnings side, a significant increase compared to the same period of the previous year. It was said that gains were made primarily in the specialties sector.

As the company, which is listed in the SDAX® small value index, further reported, sales stagnated at almost EUR 3.3 billion. At the same time, the operating group result rose to 129 million euros after 74 million a year earlier. Good business with frozen pizzas got off to a good start. On the other hand, the weak point was the sugar business of the food and sugar producer. A loss is now expected this year after the company was still hoping for a profit.

Nevertheless, Südzucker confirmed its forecasts for the year as a whole. It is therefore expected to generate revenues of between EUR 6.9 billion and EUR 7.2 billion, after EUR 6.7 billion in the 2019/2020 financial year. The operating result should be in a range of 300 million to 400 million euros.

In the past quarter, the ethanol specialist CropEnergies can only score points on the earnings side. According to its own information, the company had to accept a significant decline in sales. Nevertheless, CropEnergies is sticking to its previous goals for the full year.

According to CropEnergies, revenues in the three-month period ended at the end of August were 229 million euros. A year ago it was 245 million euros. In contrast, the operating result rose to 42.6 million euros after 28.6 million euros in the previous year. According to the information, the main reason for the improvement in earnings were the significantly higher revenues for renewable ethanol compared to the previous year. In contrast, lower sales in the food and animal feed sector put a strain on the revenue side.

However, CropEnergies reiterated the outlook for the current financial year: According to this, the company, which belongs to the Südzucker Group, plans to continue generating revenues of between 850 million and 900 million euros in 2020/21 – after 899 million euros in the previous year. CropEnergies sees the operating result as between 110 and 140 million euros. In 2019/2020 it was 104 million euros.

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Source: HSBC

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