The CEO of Südzucker, Europe's largest sugar refiner, reaffirmed expectations on Thursday of better full-year profits as its sugar sector is likely to improve performance despite the coronavirus crisis.
"Despite the unforeseeable challenges from the corona pandemic, we are confident that we will achieve a significant improvement in results in the current financial year," CEO Nils Poerksen said in a text of a speech at the company’s online meeting of shareholders.
Südzucker had on 9 July confirmed its forecast of 2020/2021 full financial year operating profit of €300 million to €400 million ($342.1 to $569.0 million) from €116 million the previous year, but warned the economic impact of coronavirus generated uncertainty.
Poerksen told shareholders on Thursday the sugar market is expected to improve after a long period with low prices.
'Long Period Of Over-Supply'
A world sugar supply deficit is expected in the current 2019/20 sugar season after a long period of over-supply which weakened prices. Sugar beet cultivation is also being reduced in Europe.
"In Europe, reduced cultivated area will lead to the EU remaining a net sugar importer in the 2020/21 sugar season," Poerksen said.
Südzucker estimates that its sugar sector’s operating result will range between a loss of €40 million and profit of €60 million against an operating loss of €236 million in the previous year.
But the forecast depended on the impact of the coronavirus crisis and of dry weather in some regions on sugar beet crops, Poerksen said.
The company's half year results are due on 8 October.
