FDBusiness.com

Europe’s largest sugar group Sudzucker expects to increase annual revenue to around Eur6.5 billion in 2011/12, up from Eur6.2 billion in the previous year, and achieve an operating profit of more than Eur600 million, against Eur519 million in 2010/11. The boost in earnings will be driven predominantly by the group’s sugar segment.

Sudzucker increased group revenues by around 9% to Eur3.34 billion in the first half and operating profit by 23% to Eur347 million with its various business segments – sugar, CropEnergies and fruit – contributing to the earnings improvement.

The sugar segment’s revenues rose to Eur1.73 billion in the first half and operating profit climbed from Eur188 million to Eur220 million. The drivers were higher sugar sales revenues, especially in the Eastern European markets, and higher sales revenues from non-quota sugar. Since the EU is now a net importer, the substantial increase in the world market price has impacted the market price level within the EU.

Although the special product segment’s revenues rose to Eur896 million in the first half, operating profit during the same period fell to Eur67 million (previous year – Eur77 million). This was mainly due to further commodity price increases, which began to have an impact in the second quarter. As expected, not all divisions have as yet been able to fully pass the increases on to the market.

The CropEnergies segment’s revenues climbed from Eur200 million to Eur253 million in the first half. Operating profit rose from Eur17 million to Eur29 million, as significantly higher commodity costs were offset here by higher ethanol and by-product sales revenues.