HAMBURG (Reuters) -Europe's largest sugar producer Suedzucker on Thursday more than doubled its quarterly profits as high sugar prices compensated for increased energy and raw material costs, and raised its forecast for full-year earnings. Second-quarter operating profit by end-August 2023/24 fiscal year rose to 310 million euros ($329.50 million) from 153 million a year earlier, the company said. Suedzucker raised its forecast for full-year 2023/24 group operating profit to between 900 million and 1 billion euros, up from its previous forecast of between 850 and 950 million euros, and against 704 million in its previous year.
"The forecast for the full year has been raised partly because we expect current high sugar prices to continue," a Suedzucker spokesperson told Reuters. "We see no signals from the world market, where sugar supplies remain tight, that sugar prices will weaken. This gives us confidence to expect a continued strong sugar market in Europe."
Tight world supplies sent global sugar futures soaring to 12-year highs in October. EU sugar prices rose to around 819 euros a metric ton in August 2023, up 69% on the year, EU Commission data said.
"We have also increased the area of sugar beet being cultivated for the group by about 10% for this season’s harvest which is now starting," the spokesperson added. "Depending on crop development, this should give us expanded sugar production to take advantage of high sugar prices."
Second-quarter operating profits in its core sugar sector rose to 213 million euros from only 22 million euros a year earlier.
"A sharp rise in costs for raw materials and energy in particular was offset by higher prices generated since the end of the last fiscal year," Suedzucker said.
($1 = 0.9408 euros)