HAMBURG (Reuters) - Suedzucker, Europe’s largest sugar refiner, on Thursday posted a 142% surge in second-quarter earnings and reaffirmed its estimate of a stronger annual profit with its sugar and biofuels sectors performing well.
Suedzucker posted an increase in group operating profit to 68 million euros ($80 million) in the second quarter of 2020/2021 fiscal year ended August 2020, from 28 million euros in the previous quarter.
The company said it benefited from a surge in sugar prices.
Suedzucker also confirmed its previous forecast of annual group operating profit of 300 million to 400 million euros, up from 116 million euros the previous year, despite the fallout from the coronavirus crisis.
In the second quarter, the sugar sector was able to cut operating loss to 41 million euros from 55 million euros a year earlier.
“The improvement was driven mainly by higher sugar sales due to the price increase since the beginning of the 2019/20 sugar marketing year, which more than offset lower sales volumes and higher production costs,” Suedzucker said.
But a disappointing sugar beet crop expected in Europe this year, weaker trend in world sugar prices and the economic uncertainty from COVID-19 are still creating uncertainty for the sugar sector, it said.
The company estimates that the sugar segment’s full-year operating result will range between a loss of 100 million euros and loss of 50 million euros, against a loss of 236 million euros last year.
“In Europe, smaller cultivation areas and renewed dry weather conditions in important cultivation regions along with more serious pest infestations will again lead to reduced sugar production,” it said.
The brief price recovery in world sugar markets is largely over, it said.
With poor sugar beet harvest and an overall lean demand caused by the pandemic, traders expect a sharper decline in sugar sales than previously forecast.
Reporting by Michael Hogan; Editing by Thomas Seythal and Sherry Jacob-Phillips
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