Germany's Südzucker, the largest sugar producer in Europe, today reported a 32% drop in operating profit year-on-year reflecting what was a challenging economic environment for the continent's sugar and bioethanol markets.
The company's stock dropped 5% this afternoon as the company forecast further declines in operating profit and revenue for 2014-2015 fiscal year.
Consolidated group revenue was €7.735 billion in fiscal 2013/14, a 1.8% decline, compared with the previous year's €7.88 billion.
Operating profit stood at €658 million, down from €972 million last year.
Among the Group's exceptional charges for the year was a €115 million fine, imposed in February of this year by German authorities after it was discovered Südzucker illegally fixed prices in collaboration with competitors since the mid-1990s.
Pfeiler & Langen, Südzucker and Nordzucker, along with seven unnamed individuals were found to have been fixing prices, sales territories and quotas between them for many years.
Furthermore, the executive and supervisory boards recommended to shareholders a dividend of €0.50 per share, lower than last year's €0.90 per share.
42% of Südzucker is owned by beet farmers from the south of Germany.
The expiry of the EU sugar regime in 2017, looks certain to put the company under pressure.
"The adaptation to the changing conditions challenge us in our core business," CEO Wolfgang Heer said Thursday at the presentation of the annual figures in Mannheim.
The company has 30 sugar factories and 3 refineries in Austria, Belgium, Czech Republic, France, Germany, Hungary, Moldova, Poland, Romania Slovakia and Bosnia-Herzegovina.
© 2014 - European Supermarket Magazine by Enda Dowling
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