French sugar maker Tereos has reported an 80% surge in its first-half net profit, helped by a rise in sugar and sweeteners prices.
The group's net profit jumped to €239 million in the six months to September 30 and sales rose 22% to €3.6 billion, Tereos said in a statement.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) surged 47% to €592 million.
Higher Selling Prices
'Results were driven by higher selling prices (sugar, alcohol, ethanol, sweeteners and electricity) coupled with effective cost management protecting the group's margins despite the pressure on raw material and energy costs,' the group said.
However, it flagged significant market uncertainties, citing large Ukrainian sugar imports into the European Union, rising raw material prices and interest rate hikes.
It added that the weather had been unfavourable in the autumn of 2023, when the sugar beet crop is in its latest stage or due to be harvested.
'As Relevant As Ever'
"Our transformation plan, implemented by all of our cooperative members and employees, has proven itself as relevant as ever, demonstrated by the excellent operational and financial results achieved in the first half of 2023/24," commented Gérard Clay, chairman of the board of directors of Tereos.
"While we should remain vigilant in the current market environment, this performance means that we can move ahead with confidence."
Sugar Price Increases
Like its European peers, including Germany's Suedzucker, Tereos has benefitted from a surge in sugar prices over the past year. In Europe, prices touched record highs, supported by a strong deficit in the bloc after a drought-hit sugar beet harvest in 2022.
Global sugar prices, which hit a 12-year high last month, have fallen sharply since due to higher production in Brazil and good beet crops in Europe which hinted of a potential small surplus in the global sugar markets from previous expectations of a deficit. Tereos has large sugarcane activities in Brazil.
Tereos expected the sugar deficit to continue in Europe in 2023/24 due to a slightly lower-than-average sugar production despite declining consumption.
The group's net debt, which has been under scrutiny in the bond market, stood at €2.42 billion at end-September, down €276 million from March 31 but up from €2.24 billion a year earlier.
Additional reporting by ESM
