Sugar and fruit concentrates spur Südzucker profit jump

By Jane Byrne

- Last updated on GMT

Related tags: European union, Generally accepted accounting principles

German ingredients group Südzucker reports a sharp rise in profits for the first half of its financial year, citing gains from its sugar and fruit segments as being particular growth drivers.

Group income within its first half year - 1 March to 31 August 2011 - jumped by around 9% from €3,068m to €3,338m, with its overall operating profit growing by about €65m (23%) to €347m, against the previous year’s €282m.

Since the EU is now a net importer, the substantial increase in the world market price has impacted the market price level within the EU.

And the Mannheim-based company said that higher sugar sales revenues, especially in the Eastern European markets, and better earnings from non-quota sugar saw its sugar division’s income increase to €1,728m from 1,671m in the first half of financial year 2011/12.

The division’s operating profit climbed to €220m up from the previous year’s 166m.

Südzucker’s sugar factories and 3 refineries are based in France, Belgium, Germany and Austria, Poland, the Czech Republic, Slovakia, Romania, Hungary, Bosnia and Moldova in the east.

Juice concentrates deliver

The firm is also an international player in the fruit preparations market and is a leading European supplier of fruit juice concentrates.

Indeed, improved margins for its concentrates saw Südzucker’s fruit segments’ operating profit grow €9m, while higher commodity prices pushed up the fruit preparation and concentrate unit’s revenues by €26m.

Income for the group’s special products division, consisting of functional food (the Beneo group), chilled/frozen products (Freiberger), and its portion packs and starch businesses rose to €896m from €762m in 2010 but the division’s operating profit tumbled €10m to €67m.

“This was mainly due to further commodity price increases, which began to have an impact in the second quarter. As expected, not all divisions have as yet been able to fully pass the increases on to the market,”​ said Südzucker.

For project full-year’s earnings, the German group is confident of an increase of group revenues to around €6.5bn. In 2010/11, it generated revenues of €6.2bn.

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