HAMBURG (Reuters) - Europe’s largest sugar producer Suedzucker on Tuesday posted a rise of around 112% in full-year earnings as the company returned to profit from four years of losses in its sugar sector and predicted higher prices would continue to boost results.
Preliminary operating profit in the fiscal year to end February rose to 704 million euros ($771.72 million) from 332 million euros in the previous year, Suedzucker said in an advance earnings release. The figures beat its forecast of 640 to 680 million euros.
Preliminary sales rose to 9.5 billion euros from 7.6 billion in the previous year, it said, ahead of the official results release scheduled for April 28. It also proposed increasing the dividend to 70 cents per share from 40 cents last year.
It raised its forecasts for operating profit for the 2023/24 financial year starting March 1 to between 725 and 875 million euros from 650 to 850 million previously.
"Our sugar sector returned to profits in our 2022/23 financial year after four years of losses," a Suedzucker spokesperson said. "Stronger sugar and bioethanol prices during the 2022/23 year have compensated for higher energy and raw materials costs."
The spokesperson said the company was confident for the year 2023/24 as the European sugar market is expected to recover from the disruption of the COVID-19 pandemic and the Ukraine war.
“We expect firm EU sugar prices in the new year provided there is no disruption from the Ukraine conflict,” the spokesperson said. He also said the European Union was a net sugar importer.
Quoting European Commission figures, he said the EU sugar price was about 800 euros a tonne in February 2023 against 650 euros in December 2022.