Nordzucker upbeat as high sugar prices boost profit 116%

·2-min read
FILE PHOTO: A confectioner pours sugar at Florian confectionery in Le pont Du loup

HAMBURG (Reuters) - Germany's second largest sugar refiner Nordzucker reported a 116% surge in annual profit on Wednesday, benefitting from high sugar prices, and said it is optimistic it will achieve good results in its new financial year.

Unlisted Nordzucker posted a 182 million euro ($200.4 million) net profit for its 2022/23 financial year to end-February, up from 84 million euros the previous year. Sales rose 16% to 2.3 billion euros.

“The increased costs of production caused by price rises for energy and other supplies for us and our farmers could be compensated for by a higher sugar price level,” CEO Lars Gorissen said in an online news conference.

The earnings increase had been achieved despite “extreme challenges” from the energy crisis, inflation, disrupted supply chains, below-average harvest yields and cost increases, Gorissen said.

Citing benefits from a corporate efficiency programme and developments in the sugar market, Nordzucker said it expects a “very good business result” in its new 2023/24 year with EU sugar prices remaining high in coming months.

EU sugar prices rose to around 804 euros a tonne in February from around 586 euros a tonne at the start of the last sugar season in October 2022, Nordzucker said.

Europe’s largest sugar producer, Germany’s Suedzucker in April posted a 112% rise in annual earnings.

Sugar futures hit 11-1/2 year highs in April on expected tight world supplies.

Nordzucker bought Australian producer Mackay Sugar in 2019, expanding into Asia and the cane sugar market.

Gorissen told Reuters separately that Nordzucker is considering further expansion, possibly with a takeover of a cane sugar production company. Regions being reviewed include Central America, Asia, Africa and Australia, he said.

“Currently we have nothing that we would exclude but also nothing that we would put a priority focus on,” he said, adding that Nordzucker is not currently in negotiations.

(Reporting by Michael Hogan, editing by Jason Neely, Kirsten Donovan)