Südzucker reports record revenue and sharply higher profit
Südzucker AG Mannheim/Ochsenfurt, Mannheim, was able to boost consolidated group revenues for the 2010/11 financial year (March 1, 2010 to February 28, 2011) by 8 percent to EUR 6.2 (prior year: 5.7) billion, the highest ever since the company was founded. All segments contributed to the revenue growth. Consolidated group operating profit improved dramatically, rising 29 percent to EUR 519 (prior year: 403) million. The sugar, CropEnergies and fruit segments reported sharply higher profits, while the special product segment's operating profit also rose thanks to a strong fourth quarter.
The executive and supervisory boards will recommend to the annual general meeting on July 21, 2011 that a dividend of EUR 0.55 (prior year: 0.45) per share be distributed. The recommendation reflects the significantly higher profits. Based on the 189.4 million common shares issued, this will result in a dividend distribution of EUR 104.1 (prior year: 85.2) million.
Sugar segment profit up sharply
The sugar segment's revenue and operating profit growth was driven mainly by non-quota sugar volumes in the first quarter of 2010/11 resulting from the additional export quota granted by the EU. The segment's revenues rose to EUR 3,279 (prior year: 3,154) million in fiscal 2010/11. Operating profit was up 30 percent to EUR 282 (prior year: 217) million. The renewed decline in quota sugar sales revenue was more than offset by lower costs and higher volumes.
Compared to the year prior, Südzucker Group's beet cultivation area in 2010 was reduced in total by about 3 percent to 388,000 (prior year: 401,000) hectares. After the records set in 2009, the growing season was marked by fluctuating and in some cases harsh weather, so that the theoretical sugar yield dropped to 11.3 (prior year: 12.3) tonnes per hectare. In total, about 26.1 (prior year 28.4) million tonnes of beets were harvested during the 2010 campaign, from which about 3.9 (prior year: 4.4) million tonnes of sugar were extracted. About 300,000 (prior year: 350,000) tonnes of sugar were refined from raw sugar cane, bringing the total volume of sugar produced to 4.2 (prior year: 4.8) million tonnes.
Special products segment extends prior year's excellent results
The special products segment's revenues rose 13 percent to EUR 1,575 (prior year: 1,396) million. All divisions - BENEO, Freiberger, PortionPack Europe and AGRANA's starch and bioethanol business - reported strong volume growth. The special product segment's operating profit of EUR 144 (prior year: 138) million in 2010/11 was again higher than the excellent result generated the year prior.
CropEnergies segment reports higher production volume at plant in Wanze, Belgium
CropEnergies was able to extend its business growth momentum and significantly improve revenues to EUR 437 (prior year: 362) million. Higher volumes of bioethanol and the associated by-products contributed substantially to this result. CropEnergies' operating profit almost quadrupled to EUR 46 (prior year: 12) million. This was driven primarily by the marked increase in capacity utilization and thus higher productivity at the bioethanol facility in Wanze, Belgium, as well as better by-product sales revenues.
Fruit segment profits from higher demand for fruit preparations
The fruit segment's revenue rose 8 percent to EUR 870 (prior year: 806) million. This rise was due to both greater volumes for fruit preparations and higher sales revenues for fruit concentrates because of commodity price increases. The fruit segment's operating profit again rose sharply, to EUR 47 (prior year: 36) million.
Workforce expands slightly
The average number of workers employed by Südzucker Group rose slightly to 17,658 (prior year: 17,493) in fiscal 2010/11. The decline in the sugar segment's workforce - especially in Eastern Europe - was offset by a rise in the number of persons employed by the fruit segment.
Results for current financial year expected to be slightly higher
Consolidated group revenue for fiscal 2011/12 is expected to rise slightly, to about EUR 6.3 billion. The special products, CropEnergies and fruit segments are expected to report rising revenues. The sugar segment's revenue should be about the same as last year. Consolidated group operating profit is forecast to come in at over EUR 550 million. Higher profits are expected to be reported by the sugar segment especially, but also by the CropEnergies and fruit segments. We do not expect the special products segment to be able to match the high prior year's level because of high commodity prices.