Südzucker Q1 2017/18 revenues climb
Südzucker AG generated consolidated group revenues of EUR 1,783 (previous year: 1,608) million in the first quarter (1 March 2017 to 31 May 2017) of the current 2017/18 fiscal year, up sharply from last year at this time. The higher revenues were driven mainly by the sugar and CropEnergies segments. Consolidated group operating result also rose considerably, ending at EUR 153 (previous year: 110) million. This result improvement was driven primarily by the sugar segment, but the CropEnergies and fruit segments also contributed. As expected, the special products segment was unable to match last year's elevated result.
Sugar segment reports results growth
The sugar segment's revenues rose to EUR 777 (previous year: 694) million. The increase was driven mainly by higher sugar sales revenues, which more than offset declining volumes. The segment’s operating result climbed to EUR 64 (previous year: 22) million, thanks mainly to higher sugar sales revenues. The increase was driven on the one hand by higher quota sugar sales revenues seen since the beginning of the 2016/17 sugar marketing year in October 2016, and on the other, by global prices for exported sugar that were still higher than last year at the beginning of the fiscal year.
Cultivation area expanded in 2017
Südzucker Group expanded its beet cultivation area to 443,644 (previous year: 384,835) hectares in 2017, up about 15 % year over year. This year, planting began for the most part as early as in previous years, amid average to excellent planting conditions.
Higher raw material costs weigh on special products segment
The special products segment was able to grow revenues to EUR 481 (previous year: 457) million, driven by steady volume growth. Its operating result remained high at EUR 41 (previous year: 46) million, but as expected, was unable to match last year’s unusually strong result, due mainly to higher raw material prices.
CropEnergies revenues and result significantly higher
The CropEnergies segment's revenues were considerably higher than last year, climbing to EUR 214 (previous year: 149) million, driven almost exclusively by greatly increased production and sales volumes after restarting the production plant in Wilton, Great Britain, in the second quarter of last year. Ethanol sales revenues too were up from last year.
Thanks to the positive revenue trend, the operating result was also significantly higher at EUR 23 (previous year: 19) million. The negative impacts of slightly higher raw material prices, operating costs from the restart of the plant in Wilton and scheduled inspection and maintenance work in Zeitz and Wanze, Belgium, in the first quarter, were more than offset.
Fruit segment reports slightly higher revenues and result
The fruit segment's revenues rose slightly, to EUR 311 (previous year: 308) million. Higher volumes of other fruit juice concentrates together with higher fruit preparations division sales revenues and favorable exchange rates offset lower sales revenues for apple juice concentrates.
The segment was able to boost its operating result to EUR 25 (previous year: 23) million, driven by higher margins on fruit preparations division sales revenues, while in the fruit juice concentrates division, raw material costs were also lower. This together with higher volumes counter-acted lower sales revenues.
Forecast for fiscal 2017/18 confirmed
Südzucker continues to expect group consolidated revenues of EUR 6.7 to 7.0 (2016/17: 6.5) billion for fiscal 2017/2018. We expect the sugar and fruit segments’ revenues to increase moderately and the special products segment’s to rise slightly. We now expect the CropEnergies segment’s revenues to range between EUR 775 and 825 (previous forecast: 725 to 800) million.
We anticipate the operating result to rise further. It should still range between EUR 425 and 500 (2016/17: 426) million, driven mainly by significantly higher sugar segment results. After the record year in 2016/17, the company expects a significant retreat for the special products segment. We now expect the CropEnergies segment’s result to range between EUR 50 and 90 (previous forecast: 40 to 80) million. A year-over-year increase is forecast for the fruit segment.