* Q1 EBIT down 54 pct at 106 mln eur, vs 79.2 mln poll avg
* Shares up 3.9 pct, recovering from 20 pct plunge in April
* Company cites sinking sales in EU's sugar quota system
(Recasts, adds shares)
By Ludwig Burger and Michael Hogan
FRANKFURT/HAMBURG, July 10 Operating profit at
Europe's largest sugar producer Suedzucker fell by
more than half in its fiscal first quarter, due to sinking sales
inside the European Union's protected sugar quota system.
European sugar prices have fallen sharply in the past year,
hurting producers and refiners, because the European Union has
allowed more imports and also plans to end the EU's sugar output
quotas in 2017, part of moves to liberalise production.
Sudzucker had warned in April it expected revenue and profit
to decrease in its current financial year due to the difficult
environment on the European sugar and bioethanol markets.
The company said on Thursday it expected operating profit to
come in significantly below the year-earlier level in the second
quarter as well.
"Export prices for non-quota sugar were less than last year
as world market prices retreated," Suedzucker added. "In the
sugar segment we expect a significant drop in revenues in fiscal
The company said it expected "a significant decline in
operating profit, mainly due to the increasing deterioration of
the economic environment in the EU sugar market."
Associated British Foods, among Europe's top sugar
companies, in April also forecast weak profits at its AB Sugar
Suedzucker's shares rose more than three percent as the
profit fall was less than expected. They were among the biggest
gainers on Germany's midcap index.
Quarterly earnings before interest and tax (EBIT) slumped to
106 million euros ($145 million), from 232 million a year
earlier, as revenue dropped in southern and eastern European
markets in particular.
That beat the average estimate of 79.2 million euros, in a
Reuters poll of banks and brokerages. Net profit after
minorities dropped 63 percent to 77 million euros, also better
The company expects full-year 2014-15 revenue at about 7
billion euros and sees operating profit falling to about 200
Suedzucker's shares have not recovered much from a 20
percent dive they took on April 8, when the company warned on
Suedzucker's bioethanol unit, CropEnergies, on
Tuesday also posted reduced profits due to low bioethanol
($1 = 0.7331 Euros)
(Additional reporting by Maria Sheahan; Editing by Matt
Driskill and Jane Merriman)