MANNHEIM (dpa-AFX) – The Südzucker Group (Südzucker) is becoming more confident, above all thanks to the good business of its biofuel subsidiary CropEnergies. Because they stocked up on raw materials and energy early on and the sales prices for bioethanol are rising, both Cropenergies and the sugar giant now expect significantly higher operating profits in this financial year, as both companies surprisingly announced on Wednesday in Mannheim. Shares of the two companies rose.
The Südzucker shares listed in the SDAX gained 4.55 percent to EUR 13.11. The shares had already made up for the sharp drop in prices to less than 10 euros as a result of the Russian attack on Ukraine. At times they were quoted at their highest level since mid-January. The Cropenergies shares increase by 4.95 percent to 11.02 euros. However, there is still a lot of room for improvement up to the most recent high of EUR 15 at the end of April.
Südzucker is now aiming for consolidated operating profit of EUR 400 to 500 million in the 2022/23 financial year (by the end of February). So far, the sugar and food company had planned EUR 300 to 400 million. According to preliminary figures, the operating result for the first quarter of the business year up to the end of May was 160 million euros, a good three times as high as the year before with 49 million euros. The development was largely supported by the results of the biofuel subsidiary Cropenergies, which also raised its outlook for the year in the morning.
The prospects for Südzucker have also brightened in terms of sales. So far, the Mannheim-based company has been aiming for revenue of 8.7 to 9.1 billion euros for the year as a whole, now it should be 8.9 to 9.3 billion euros. In the first business quarter (March to May), sales had climbed by almost 30 percent to around 2.25 billion euros.
Both Cropenergies and the specialty division contributed to the raised forecast. Südzucker produces pizzas, pasta and snacks here, as well as ingredients for food and pet food. However, the effects of the Ukraine war on the procurement markets, the prices for raw materials and also the sales markets remained difficult to assess, the group said. Another risk lies in the corona pandemic. In the forecast, Südzucker assumes that the war in Eastern Europe will remain limited in terms of region and time.
As has often been the case, Cropenergies presented its own forecast increase. Because the operating result in the first quarter increased almost sixfold to 87 million euros, the ethanol specialist is now assuming an operating profit of 165 to 215 million euros for the year as a whole. So far, the range had been only 105 to 155 million.
The main reason for the development is hedging transactions for raw materials and energy, which were made before the outbreak of the Ukraine war and the associated sharp rise in prices. While the sales prices for bioethanol rose significantly, Cropenergies was able to keep purchasing costs under control. However, the company said that the positive earnings effects of the hedges would diminish noticeably in the coming quarters.
The bioethanol company achieved a significant increase in sales in the first quarter of the business year up to the end of May, with sales increasing by 86 percent year-on-year to EUR 399 million. For the year as a whole, the Mannheim-based company is also expecting a little more business here: instead of the previously planned 1.35 to 1.45 billion euros in sales, 1.45 to 1.55 billion euros should be achieved
Südzucker intends to present the detailed report for the first quarter on July 7, Cropenergies plans to do so a day earlier./men/stw/jha/
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