Sugar group Tereos posts first full-year profit in three years

FILE PHOTO: A view shows the Tereos sugar factory in Escaudoeuvres, Northern France, April 30, 2020. REUTERS/Pascal Rossignol

PARIS (Reuters) - French sugar group Tereos on Wednesday posted its first full-year net profit in three years, mainly helped by a rebound in sugar prices in Europe, and said it was confident for the current season despite the COVID-19 crisis.

The second largest sugar maker in the world said it had a net profit of 24 million euros in the year to March 31, up sharply from a loss of 260 million in 2018/2019, also helped by a rise in volumes and cost cuttings.

Tereos, whose operations are mainly based in Europe and Brazil, was confident that the COVID-19 crisis would have a limited impact on its business as it had already contracted most of its export volumes in Brazil and sales in Europe.

European sugar prices in April stood at an average 375 euros a tonne, compared to 370 euros at the end of March, supported by a supply deficit in the bloc, it said.

Despite improved results, Tereos’ net debt remained high at 2.56 billion euros, against 2.63 billion euros last year.

The group, which also has a large starch and sweeteners business, still has plans to open up to other investors within two to three years, Tereos CEO Alexis Duval said.

The impact of the closure of bars and restaurants in Europe to stem the spread of the new coronavirus had cut demand for drinks by 25% and for ice cream by 24%, which was not fully compensated by extra consumer purchases at retailers, he said.

A rise in sugar sales in France caused its market share to jump just as its main competitors, Germany's Suedzucker SZUG.DE and French cooperative group Cristal Union, closed factories.

Duval was confident that a collapse in ethanol demand due to less driving and air travel, which lead to an average fall in demand of 50% for Tereos over March and April, was only temporary.

Reporting by Sybille de La Hamaide and Sudip Kar-Gupta; editing by Jason Neely and David Evans