HAMBURG (Reuters) -Suedzucker on Thursday confirmed a drop in first-quarter earnings as Europe’s largest sugar producer faced an economic fallout from the coronavirus pandemic, though it expects profit to climb in its full financial year.
Suedzucker said group operating profit dropped 20.1% on-year to 49 million euros ($58 million) in the first quarter ended May 31.
The company confirmed it still expects full-year group operating profit of 300 million to 400 million euros, up from 236 million euros last year.
The company had made a limited advanced announcement of its earnings last month.
Its full-year operating profit is forecast at between breakeven and 100 million euros.
“We expect an improvement in the EU sugar market from October 2021 and also expect to achieve higher sugar sales prices in the second half of the business year,” a Suedzucker spokesperson told Reuters.
“The EU is expected to remain a net sugar importer with the overall European sugar supply picture looking tight. With world sugar prices likely to firm, this should also mean higher EU sugar prices in coming months.”
Raw sugar futures this week hovered around four-month highs as crop damage in top producer Brazil after frost was assessed.
“We have slightly expanded our sugar beet area for the new harvest,” the spokesperson added. “We are also hoping that the general economic framework will improve with the impact of COVID-19 declining as more people are vaccinated.”
Suedzucker’s 2021 sugar beet plantings are up 3.1% at 353,600 hectares.
The company’s first-quarter numbers were dented by operating losses of 25 million euros in the sugar sector, wider from an operating loss of 16 million euros a year earlier.
(Reporting by Michael Hogan, editing by Riham Alkousaa and Sherry Jacob-Phillips)