HAMBURG (Reuters) -Europe’s largest sugar producer, Suedzucker, on Thursday posted a rise of 73.5%% in quarterly earnings as higher sugar and biofuel prices counteracted the impact of rising energy and raw materials costs.
Suedzucker said operating profit in the third quarter, to the end of November, of its 2022/23 fiscal year had risen to 220 million euros ($237 million) from 127 million euros in the same year-ago quarter.
The “sugar segment returned to profitability thanks to a significant improvement in results,” it said.
Suedzucker confirmed its forecast in December of full-year 2022/23 operating profit rising to between 530 million and 630 million euros from 332 million euros in the previous year.
German energy prices rose after Russia cut gas deliveries following the beginning of the war in Ukraine.
But European Union sugar prices had risen from 443 euros a tonne in March 2022 to 586 euros a tonne in October 2022, according to the latest figures available from the European Commission, Suedzucker said.
In Europe, a 4% reduction in sugar beet plantings has led to forecasts that this winter’s beet harvest will be below last year’s. Tighter supplies mean the EU will remain a sugar importer in the new year.
“Given this positive market environment, it has been possible to pass on the drastic increases in raw material and energy costs to the market with significant sugar price increases since October 2022,” Suedzucker said.
In the first nine months of 2022/23, the sugar division posted an operating profit of 132 million euros, compared with a loss of 10 million euros in the year-earlier period.
Suedzucker expects its sugar segment to post a full-year 2022/23 operating profit of 150 million to 200 million euros against a loss of 21 million euros last year.
It repeated its forecast of operating profit in its upcoming 2023/24 year of between 650 million and 850 million euros.
(Reporting by Michael Hogan; Editing by Miranda Murray and Bradley Perrett)