(Adds detail from paragraph one)
HAMBURG, Jan 11 (Reuters) - Europe’s largest sugar refiner, Suedzucker, said EU deregulation enabled it to boost sugar exports in the third quarter but falling bioethanol prices hit its overall operating earnings.
Suedzucker confirmed its previous forecast of group operating profit for its 2017/18 financial year of 425 million to 500 million euros ($508 mln-$597 mln) against 426 million euros in the previous year.
It raised its guidance for full year sales revenues to a range of 6.9 billion to 7.1 billion euros, from a previous forecast for 6.7 billion to 7 billion euros.
Operating earnings in the third quarter to the end of November fell 13.1 percent on the year to 103 million euros, but sales rose 6.4 percent to 1.8 billion euros, Suedzucker said.
“The quarterly operating earnings fall was largely due to decreased prices for bioethanol and increased raw materials costs in the special products sectors, the result from sugar was on the previous year’s level,” a Suedzucker spokesman said.
“High costs for cheese and other diary products such as for pizza production were a factor in the special products sector.”
A radical deregulation of the EU’s sugar market took effect at the end of September, with farmers free to grow as much as they want and refiners free to export sugar globally after decades of restrictive output quotas and export limits. Guaranteed minimum sugar prices also ended.
One impact of EU market liberalisation is that EU sugar prices are linked to world prices, which are currently weak.
“Since the beginning of the new sugar marketing year in October 2017, sales revenues for both EU and export (sugar) volumes have declined significantly,” Suedzucker said.
“Higher export volumes since October partially compensated for the decline and as a result the third quarter operating result remained slightly above last year’s.”
Suedzucker’s third quarter operating earnings from sugar rose 1.9 percent to 38 million euros, sugar sales rose 9.2 percent to 831 million euros.
Suedzucker said its new sugar harvest is looking good. It expects to produce about 5.7 million tonnes of sugar in the harvest and production season this winter, up from 4.4 million tonnes last season.
$1 = 0.8370 euros Reporting by Michael Hogan; Editing by Maria Sheahan and Susan Fenton