Germany's second largest sugar refiner, Nordzucker, has reported a 116% surge in annual profit, benefitting from high sugar prices, and said it is optimistic it will achieve good results in its new financial year.
Nordzucker posted a €182 million net profit for its 2022/23 financial year to end-February, up from €84 million the previous year. Sales rose 16% to €2.3 billion.
'Higher Sugar Prices'
“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,” chief executive 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 2023/24 financial year with EU sugar prices remaining high in coming months.
EU sugar prices rose to around €804 a tonne in February from around €586 a tonne at the start of the last sugar season in October 2022, Nordzucker said.
Europe’s largest sugar producer, Germany’s Südzucker in April posted a 112% rise in annual earnings.
Sugar futures hit 11-1/2 year highs in April on expected tight world supplies.
Expansion Into New Markets
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.