Südzucker operating profit improves further in third quarter

Operating profit generated by Südzucker AG Mannheim/Ochsenfurt, Mannheim, in the first nine months (March to November 2009) of the current 2009/10 fiscal year was up 68 percent to EUR 308 (prior year 184) million. Consolidated group revenues were slightly lower than last year, down three percent to EUR 4.4 (prior year 4.6) billion. Despite the difficult economic environment, Südzucker confirms its forecast for the 2009/10 fiscal year overall. Revenues are still expected to come in unchanged from last year at EUR 5.9 billion and operating profit continues to be forecast at about EUR 400 (prior year 258) million, considerably higher than last year.

The substantial growth in the group's consolidated operating profit in the first nine months of the current fiscal year was generated by the sugar, special products and fruit segments. Despite lower quota sugar volumes and reduced quota sugar sales, the sugar segment's operating profit rose to EUR 173.8 (prior year 100.0) million, while revenues remained nearly the same at EUR 2.5 (prior year 2.6) billion. Cost reductions and substantially lower charges from the restructuring phase of the EU sugar market regulation contributed significantly to this result.

The special product segment's revenues declined slightly, to EUR 1.0 (prior year 1.1) billion in the first nine months of the current fiscal year. The segment was able to improve operating profit to EUR 105.5 (prior year 80.7) million.

In the fruit segment, operating profit rose sharply to EUR 25.4 (prior year -12.8) million, while revenues came in at EUR 607.7 (prior year 620.7) million. The fruit segment's prior year's numbers included a EUR 32.4 million inventory write-down on apple juice concentrates.

The CropEnergies segment's revenues rose to EUR 272.0 (230.7) million. The segment was able to generate an operating profit close to last year's level. It came in at EUR 4.4 (prior year 4.5) million in the third quarter. As a result, operating profit for the first nine months was also positive at EUR 3.6 (prior year 15.6), even though unplanned repairs were required at the new factory in Belgium.

The beet harvest was better than average, driven by unusually favorable weather conditions, particularly in Germany, Belgium and France. As a result, the average group-wide sugar yield came in at 12.3 (prior year 11.7) tonnes per hectare. Some of Südzucker Group's twenty-nine beet sugar factories started processing beets as early as the first half of September 2009. The last factories will close the campaign at the end of January 2010. The average campaign duration is expected to be 110 (prior year 96) days. Including raw sugar refining, sugar production is expected to reach 4.7 (prior year 4.6) million tonnes.

While cash flow improved qualitatively to EUR 418.7 million, the group was able to systematically pay down loans. Net financial debt was EUR 892.9 (prior year 1,617.9) million, EUR 725 million less than last year.