Südzucker raises revenue projections - confirms profit forecast

Half-year operating profit impacted by one-time inventory write-down in fruit segment

Mannheim/Ochsenfurt-based Südzucker AG's consolidated half-year revenues (March 1 to August 31, 2008) came in at EUR 2,997.5 million, up about 6 % from last year's EUR 2,821.9 million. Most of the revenue growth was generated in the special products segment. During the first half of the fiscal year, group operating profit declined from last year's EUR 120.4 million to EUR 81.4 million, despite substantially higher earnings in the sugar segment. The special product segment's profits were predominantly impacted by commodity prices, which were up over the short term, and the startup costs of the bioethanol plant in Pischelsdorf. The fruit segment had to contend with an inventory write-down that led to an operating loss of EUR 21.2 million (last year: + EUR 18.7 million) in the first half of the fiscal year.
The commodity and market reform charges that had been forecast still significantly shaped the 2008/09 business results to the end of the first half of this fiscal year. However, ultimately even the fruit segment, which went into the red in the second quarter due to the inventory write-down, is expected to make a small profit contribution. Südzucker has raised its revenue range forecast for 2008/09 by EUR 200 million. Revenues are now expected to come in between EUR 5.8 and EUR 6 billion (last year: EUR 5.8 billion), based on the solid revenue growth in the first half year. Südzucker confirms its earlier consolidated operating profit projections: Profits are expected to come in between EUR 230 and EUR 260 million versus EUR 233 million in 2007/08.
Südzucker Group expects to harvest 24.1 (28.8) million tonnes of beets and produce 3.7 (4.3) million tonnes of sugar from the beet processing that started in September/October 2008. The decline is mainly due to the sugar market regulation reforms, under the terms of which Südzucker Group surrendered about 21 percent of its sugar quota to the EU restructuring fund. An additional 0.3 (last year: 0.3) million tonnes of sugar are being refined from cane sugar.