Sugar manufacturer Nordzucker has said that it expects a positive earnings outlook for the coming financial year, despite turbulence in the market, after the business reported operating profit of €114 million in in its 2021/22 financial year.
The group reported revenue of €1.9 billion for the period, which was €273 million higher than the previous year. Operating profit was €33 million higher.
Nordzucker cited higher price levels for sugar, and a 'significant increase' in sugar sales as contributory factors to its full-year performance, while its majority interest in cane sugar producer Mackay Sugar Ltd. in Australia also reaped dividends.
“With our optimisation programme launched three years ago, we were able to generate a profit contribution of about €70 million, in addition to the effects of the good market development," commented Dr Lars Gorissen, chief executive.
"In view of significantly increased costs in the 2021/22 campaign, this contribution has been essential for the steadiness of the company. Through this outstanding performance of our employees throughout the group, we have strengthened our competitiveness in the long term and prepared the company well for the future.”
The group said that it is paying higher beet prices, given the current situation on the agricultural markets, in which costs are rising for farmers in areas such as fuel and fertiliser.
It added that it has plans to expand its cane sugar operations, and is 'examining various options' to that effect.
Looking ahead, the group anticipates a positive 2022/23, provided that sufficient energy is available for sugar protection in its factories due to the ongoing conflict in Ukraine.
It said that it is making 'intensive preparations' for the upcoming campaign, which begins in September, adding that the current energy market situation requires 'particular flexibility'. To this end, the group is looking to alternative energy sources for sugar production.
"We are optimistic that we will be able to provide the planned sugar quantities even under possibly difficult conditions,” added Alexander Godow, the group's recently appointed COO.