(Adds CEO comment from press conference)
HAMBURG, May 20 (Reuters) - Suedzucker, Europe’s largest sugar producer, gave an upbeat outlook for its new financial year with a stronger EU sugar market expected to improve its performance.
Suedzucker gave a new forecast of group operating profit for its 2021/22 fiscal year starting on March 1 of between 300 million and 400 million euros ($365.58-$487.44 million).
An overall positive sugar market environment is expected in the EU this year, CEO Niels Poerksen told reporters.
As countries emerge from coronavirus lockdowns sugar demand is expected to rise as retail and hospitality sectors resume, he said. The EU is expected to remain a net sugar importer.
Suedzucker estimates that the sugar sector’s 2021/22 result will range between break-even and an operating profit of 100 million euros.
Also on Thursday, Suedzucker said its sugar sector 2020/21 operating loss was 121 million euros, down from a 236 million euro loss the previous year.
“The improvement was driven mainly by higher sugar sales revenues due to price increases at the beginning of the 2019/20 and 2020/21 sugar marketing years,” the company said.
This more than offset lower sales volumes, higher production costs and lower capacity utilization as a result of a smaller cultivation area and below-average beet yields during 2020.
The company confirmed operating profits in its 2020/21 financial year rose to 236 million euros from 116 million euros the previous year, helped by firmer sugar prices and a corporate restructuring programme.
It had made an advance release on earnings on March 24.
Sugar futures hit their highest in nearly four years in February, buoyed by tightening short-term supplies, and remained supported in May amid soaring ethanol prices and concerns over top producer Brazil’s sugar cane crop.
High raw materials costs are expected to cloud the outlook for Suedzucker’s ethanol unit CropEnergies.
Suedzucker shares were down 2.6% at 13.94 euros at 1033 GMT. ($1 = 0.8206 euros) (Reporting by Michael Hogan, editing by Emelia Sithole-Matarise and Elaine Hardcastle)