Südzucker posts strong third-quarter results
Südzucker AG Mannheim/Ochsenfurt reported consolidated group revenues that were up five percent to EUR 4.6 (previous year 4.4) billion in the first nine months of the current 2008/09 financial year. Operating profit climbed four percent to EUR 184 (previous year 176) million during the same period. Südzucker has confirmed its 2008/09 fiscal year revenue forecast of EUR 5.8 to 6.0 (previous year 5.8) billion and total operating profit of EUR 230 to 260 (previous year 233) million.
This positive development is primarily driven by the sugar segment, since last year's restructuring costs did not recur. Despite the special products segment's strong revenue growth of 22 percent, temporary high raw material costs and commissioning expenses for the bioethanol plant in Pischelsdorf still weighed on operating profits. The fruit segment has already made visible progress on improving revenue and operating profit during the quarter, after the inventory write-down in the first half year. As a result, revenue will reach almost the same level as a year prior by the end of the fiscal year and the loss reported to date will have been almost fully compensated by that time.
Many special items caused by the sugar market regulation reforms continue to impact the results during the current 2008/09 fiscal year. Income from operations in the first nine months of the 2008/09 financial year, consisting of an operating profit of EUR 183.5 (previous year 175.7) million and the result from restructuring and special items of EUR 100.1 (previous year -62.7) million, came in at EUR 283.6 (previous year 113.0) million. Earnings per share for the first nine months of EUR 0.79 (previous year 0.01) per share thus also include the earnings shown under special items for the restructuring assistance associated with the quota returned during the so-called second wave in March 2008. The significant rise in non-current assets of EUR 247.6 to 4,339.8 (previous year 4,092.2) million was primarily due to the receivables from the EU restructuring fund in the amount of EUR 446.5 million. The EU intends to pay one hundred percent of the amount owing already in the first half of 2009. The lower inventory accumulation due to the market-regulation-driven reduced quota sugar production during the 2008/09 sugar marketing year, as well as the budgeted lower liquid assets required for financing the capital spending program, are the reasons for the decline of EUR 719.0 million in non-current assets to EUR 3,680.1 (previous year 4,399.1) million. The increase of EUR 515 million in net financial debt to EUR 1,617.9 (previous year 1,102.9) million as of the November 30 record date is caused by the temporary working capital financing requirements, which were primarily defined by the sugar market regulation reforms, and the bioethanol plant expansions.
After Südzucker Group's quota surrender in January and March 2008 of 871,000 tonnes in total under the terms of the EU restructuring process, the group's total quota fell about 21 percent to 3.2 (previous year 4.1) million tonnes. The beet cultivation area only declined by about 16 percent in 2008/09, mainly because Südzucker exploited the new opportunities to sell non-quota product into the "industrial sugar" market. Favorable weather conditions in summer and fall of 2008 led to an excellent beet harvest and average sugar yield of 11.7 (previous year 10.9) tonnes per hectare; 4.2 (previous year 4.6) million tonnes of sugar were produced (including refined raw sugar).
The group's workforce shrank to 18,279 (previous year 19,564). The decline of 1,542 employees in the sugar segment due to the forced factory closings was offset by an increase of 257 workers in the special products and fruit segments.