German food ingredients giant Südzucker has reported ‘sound’ third quarter results despite lower yearly sugar yields, with profits boosted by the success of its special products division.
Group revenues rose roughly 5% for the first nine months of 2010/11 to €4.667m, compared with the same three quarters in 2009/10, and the firm predicts overall revenues of about €6bn (up from €5.7bn) by the end of the year.
Südzucker’s special products group comprises functional food (the BENEO group), starch, chilled and frozen products (Freiburger) and its portion packs businesses, and the firm emphasised in a financial statement that the division is an “important growth driver” despite commodity price rises.
Special products beat commodity costs
Revenues for special products rose to €1.166bn, as against €1,051bn in the previous year, while operating profit was €112m up from €106m. “Steady volume growth and rising sales revenues, especially in the starch division, more than offset higher commodity price levels.”
“The revenue increase continues to be carried predominantly by the special products and CropEnergies segments. All segments contributed to operating profit growth,” said Südzucker.
Meanwhile, sugar revenues “came in slightly higher than the previous year” at €2.537m (€2,507m in 2009/10), while a “substantially higher operating profit of €236m (previous year €174m) was mainly driven by the one-time, high exports in the first quarter of non-quota sugar from the 2009 campaign as well as by significantly higher quota sugar volumes.”
Variable weather hits beet
Despite this relative success, Südzucker said that “variable and sometimes unfavourable weather conditions had a strong impact on the 2010 [sugar beet] growing season, which did not match the extraordinarily high levels of the prior year”, especially in Western Europe.
Accordingly, the firm’s sugar yield totalled 11.4 tonnes per hectare during the sugar season, from which around 4.3m tonnes of sugar were produced by the reporting period; this compares with yield and hectarage figures of 4.8m and 12.3 tonnes for 2009.
“The campaign at Südzucker Group’s 29 beet sugar factories started in the second half of September 2010 under initially excellent harvest conditions, but was hindered in late November by the early onset of winter throughout Europe,” said the firm.
“After an average campaign duration of 102 days (previous year: 116 days) the campaign is expected to end at the last factories by mid-January.”
Südzucker’s sugar factories and 3 refineries are based in France, Beligium, Germany and Austria, Poland, the Czech Republic, Slovakia, Romania, Hungary, Bosnia and Moldova in the east.
The firm is also an international player in the fruit preparations market and is a leading European supplier of fruit juice concentrates.