HAMBURG, May 13 (Reuters) - German bioethanol producer CropEnergies said on Wednesday demand for bioethanol is expected to recover as the relaxation of coronavirus lockdowns in Europe enable more people to use their cars.
It was not yet possible to forecast to what extent increased demand for bioethanol for hand sanitizers would offset the reduced demand for use in vehicle fuels, CEO Joachim Lutz said in a conference call with journalists.
But he expected a normalisation of European fuel markets in the second half of 2020, from the summer.
Several European countries, including Germany, have compulsory blending of bioethanol in gasoline to reduce pollution, so reduced fuel usage also hits bioethanol demand.
Demand for bioethanol for blending with gasoline fell in April and May following lockdowns imposed to curb the spread of the coronavirus that reduced motoring, Lutz said.
But there was a strong increase in bioethanol demand for hand sanitizers and the company re-directed production.
“An improvement in earnings is expected in the course of the financial year as restrictions are being eased gradually in more and more countries,” the company said. “This will again contribute to higher fuel demand.”
CropEnergies, a unit of German sugar producer Suedzucker , said on Wednesday it expected a “significant decline” in revenues and operating profit in its current 2020/21 financial year that started in March 2020, just as the lockdowns across Europe reduced car use and so fuel demand.
Bioethanol prices are starting to recover, Lutz said. Prices had started 2020 at about 600 euros a cubic metre and fallen to a low point around 350 euros a cubic metre as countries went into lockdown. Prices have now recovered to about 500 euros a cubic metre, he said.
The company reported net profits of 74.6 million euros in its 2019/20 financial year, up from 21.3 million euros in the previous year.
The company’s results in the first quarter of the new financial year would suffer from the impact of coronavirus, Lutz said in the conference call. But an overall break-even operating result in the first quarter of the new financial year was still possible. (Reporting by Michael Hogan; Editing by Alex Richardson)