Germany's second-largest sugar refiner Nordzucker on Friday posted a first-half pretax loss of €12 million ($13.3 million), citing continued low sugar prices.
Unlisted Nordzucker had posted a €36 million loss for the 2018/19 full year and said in May it that it expected a loss in its 2019/20 financial year.
Europe’s sugar producers continue to suffer from the double blow of low sugar prices and European Union market liberalisation that has exposed them to depressed world markets.
Germany’s Suedzucker, Europe's largest sugar refiner, also posted a fall in earnings this month on depressed sugar prices.
Challenging Business Situation
Nordzucker acknowledged its 'business situation remains challenging' and that its first-half losses had been expected because declining volumes and sugar prices that do not cover costs.
Global sugar prices ended 2018 at their lowest in 10 years amid heavy oversupply and hit 11-month lows in early September.
Comprehensive cost cuts by Nordzucker, especially in administration, reduced its losses but did not fully offset them, the company said.
"According to current projections, we expect a loss at the end of the year that will be significantly lower than the previous year's loss,” said finance chief Alexander Bott.
"With the help of our far-reaching cost-cutting measures and redesigned sales strategy, we intend to return to profitability in 2020/21. The first signs of a recovery in sugar prices will probably only be fully reflected in the balance sheet for the following year."