German sugar manufacturer Nordzucker has reported an 18% drop in group revenues to €1.4 billion in its financial year ended 28 February 2019 from €1.7 billion a year earlier.
Extreme market developments and the scrapping of fixed quotas and minimum prices are believed to be the primary reasons behind the company's losses.
The company incurred an operating loss of €58.1 million during this period.
The net equity ratio remained stable at 66%, while net investments fell to €260 million in 2018/19 from €308 million in 2017/18
In November of last year, the sugar group had anticipated losses into 2020 due to tough conditions in the European market.
Outlook
Nordzucker expects to be in the red for fiscal year 2019/2020 but anticipates a recovery in the sugar market in the medium term.
"In the medium term, we expect prices to recover. Our strategic focus is clearly on sugar from beet and cane," said chief executive Dr. Lars Gorissen.
The company believes that by focusing on its core business of beet and cane it will be well-positioned for future growth in Europe and beyond.
In February of this year, Nordzucker agreed to acquire a 70% stake in Australia's Mackay Sugar Limited (MSL) to enter the cane sugar production market outside of Europe.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
