Suedzucker reports 63% plunge in quarterly profit, lowers full-year outlook 

​UK – Suedzucker, Europe’s largest sugar producer, has reported 63 percent decline in its quarterly operating profit, attributed to deteriorating conditions in the sugar market. 

The company posted an operating profit of €114 million (US$124.7M) for the second quarter of its 2024/25 fiscal year, down from €310 million during the same period last year. 

Revenue for the quarter also fell slightly to €2.541 billion (US$2.8B), compared to €2.560 billion (US$2.8B) in the corresponding period of the previous year.  

Meanwhile, EBITDA dropped to €190 million, a sharp decline from €383 million recorded in the same quarter last year. 

In September, Suedzucker warned investors of declining earnings due to weaker-than-expected market conditions in its core sugar business.  

Following the second quarter results, the company further revised its full-year profit forecast, now expecting earnings to fall between €175 million (US$191.4M) and €275 million (US$300.7M), a significant reduction from its previous projection of €500M (US$546.8M) to €600 million (US$656.2M).  

Last fiscal year, Suedzucker reported a profit of €947 million (US$1B). 

The company pointed to improved sugar beet harvest expectations across Europe as a major factor behind the increased supply of sugar, which has driven down market prices.  

European Union (EU) sugar prices, which peaked at €856 (US$936.13) per metric ton in December 2023, fell to €775 (US$847.55) per ton by July 2024.  

The current spot price has since dropped below that average as expanded cultivation and favorable harvest conditions put additional pressure on the market. 

Suedzucker now anticipates its sugar division will record full-year operating losses of between €50 million (US$54.7M) and €150 million (US$164M).  

The company noted that the downward trend in EU sugar prices had accelerated rapidly in recent weeks, leading to an unexpected deterioration in market conditions. 

A strong 2024 harvest forecast in Europe, coupled with increased imports from Ukraine, has further expanded the sugar supply, exacerbating the price declines.  

The EU’s sugar output is projected to rise by more than 6 percent for the 2024-25 season, driven by an increase in planted area and improved sugar beet yields. 

Data from the European Commission show that average sugar prices in the EU have dropped by about 8 percent this year.  

Analysts have warned that later-dated contracts are attracting much lower prices, forcing producers to sell at levels below production costs 

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE