Group Revenue: Increased by 1% to EUR2.6 billion.
Group EBITDA: Decreased by 35% to EUR230 million.
Group Operating Results: Down by 45% to EUR155 million.
Cash Flow: Decreased to EUR178 million.
Net Financial Debt: Reduced by EUR330 million compared to the prior year, standing at EUR1.6 billion.
Sugar Segment Revenue: Increased significantly due to higher sales volumes.
Sugar Segment Operating Results: Declined due to increased production costs.
Special Products Segment Revenue: Decreased to EUR579 million.
Special Products Segment Operating Results: Increased due to higher margins.
CropEnergies Revenue: Decreased to EUR231 million.
CropEnergies Operating Results: Declined to EUR6 million with a margin of 2.6%.
Starch Segment Revenue: Decreased to EUR250 million.
Starch Segment Operating Results: Declined to EUR6 million.
Fruit Segment Revenue: Increased to EUR415 million.
Fruit Segment Operating Results: Increased to EUR27 million.
Earnings Per Share: EUR0.36.
Cash Flow Per Share: EUR0.87.
Full Year Revenue Guidance: Expected between EUR10 billion to EUR10.5 billion.
Full Year Operating Profit Guidance: Expected between EUR500 million and EUR600 million.
Full Year EBITDA Guidance: Expected between EUR900 million to EUR1 billion.
Release Date: July 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Suedzucker AG (SUEZF) confirmed its full-year guidance for fiscal year 2024-2025, indicating confidence in its overall business strategy.
Group revenues increased by 1% to EUR 2.6 billion, driven by growth in the sugar and fruit segments.
Net financial debt decreased by EUR 330 million compared to the previous year, reflecting improved financial health.
The fruit segment showed a positive trend with increased sales volumes and stable margins, leading to higher operating results.
The special products segment experienced an increase in operating results due to higher margins, despite a moderate decrease in revenues.
Negative Points
Group EBITDA decreased by 35% to EUR 230 million, and operating results fell by 45% to EUR 155 million, indicating a significant decline in profitability.
The sugar segment faced a strong decline in operating results due to increased production costs and moderately declining prices.
CropEnergies segment revenues were significantly down due to lower ethanol prices, impacting operating profit.
The starch segment experienced a significant decline in revenues and operating profit due to falling prices for ethanol and some starch products.
The company anticipates volatility in sugar prices due to weather conditions and geopolitical factors, which could impact future earnings.
Q & A Highlights
Q: Can you explain the discrepancy between the earnings of Suedzucker AG shareholders and the earnings per share? A: Yes, the discrepancy is due to the payments for the hybrid bond. The earnings per share reflect the deduction for these payments, which is why they don’t match the total earnings of the shareholders. This has been the case since the annual report ’23-’24. – Nicolai Baltruschat, IR
Q: Why is there a difference in performance between AGRANA and CropEnergies, given both produce bio-ethanol? A: The two units operate in different regions and markets, with different raw material intakes and hedging positions. AGRANA focuses more on corn, while CropEnergies uses sweet wheat. Both were affected by lower ethanol prices, but their business setups are not directly comparable. – Stephan Meeder, CFO
Q: What is the current hedging position for CropEnergies regarding raw materials and ethanol? A: CropEnergies maintains a strong hedging position for grain, covering over 50%. Ethanol hedging is less liquid, so the coverage is typically lower than for grain. The strategy involves detailed market analysis and adjusting positions accordingly. – Stephan Meeder, CFO
Q: Do you expect Suedzucker to export sugar outside the EU this fiscal year? A: Exporting is always an option, depending on harvest expectations and market conditions. The EU has reached its duty-free import limit from Ukraine, so we don’t expect additional volumes from there this year. Export decisions will be based on the EU’s sugar balance and market opportunities. – Stephan Meeder, CFO
Q: What are your expectations for sugar and ethanol pricing in your guidance? A: For sugar, we expect world market prices to range between USD 0.18 to USD 0.21 per pound, translating to EUR 500 to EUR 550 for white sugar in Europe. Ethanol prices are expected to be supported by strong demand due to increased blending mandates and a deficit market in Europe. – Stephan Meeder, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
