HAMBURG (Reuters) - Europe’s largest sugar producer Suedzucker on Wednesday raised its full-year profit forecast, as it expects higher sugar prices to compensate for rising energy and raw materials costs.
Suedzucker raised its forecast for group operating profits in its financial year to February 2023 to between 530 million euros and 630 million euros ($524.4 million-$623.3 million) from a previous forecast of 450 million to 550 million euros.
The year before it posted operating profit of 332 million euros.
A spokesperson for Suedzucker, which has a wide range of non-sugar interests ranging from processed foods to biofuels, told Reuters the increase would be driven largely by an improved performance in its sugar sector.
"As we said in our last quarterly report, we are achieving and we expect to be able to achieve higher sugar prices in the second half of our financial year in our main markets," the spokesperson said.
"This will help compensate for the impact of higher raw materials and energy costs.”
Germany’s sugar industry is among heavy gas users suffering from a plunge in Russian gas exports to Europe, which has sparked a continent-wide energy crisis.
The sugar processing season to refine this year’s beet crop is now underway in Germany and usually ends around early January.
“We have taken steps to ensure energy supplies in our factories this winter,” the spokesperson said. “We are now feeling confident that we will be able to come through this year’s sugar processing season with sufficient energy,”
“But overall, the situation in Europe with energy supplies is still uncertain.”
Sueducker stressed on Wednesday that the impact of the Ukraine war on its markets remain difficult to assess, while risks from the coronavirus pandemic also remain.
($1 = 1.0107 euros)
(Reporting by Michael Hogan; Editing by Jan Harvey)