Cristal Union will likely double its net profit this season on higher expected output and price support from lower Brazilian production, the director-general of France’s second-largest sugar maker said.
The cooperative reported a 69 million euro ($84 million) net profit in the year to Jan. 31 on Monday following an 89 million euro loss, confirming news reported by Reuters in late May.
The results were boosted by a rebound in sugar prices and came despite a 30% slump in sugar beet yields last year due to drought and disease.
Sales of alcohol to make disinfectants boosted by the pandemic surged 10-fold to 500,000 hectolitres to fully offset a fall in sales of ethanol used in biofuels for vehicles, Cristal Union said.
Sugar futures hit their highest in nearly four years in February and continued to hover around 18 cents per lb in May amid soaring ethanol prices and concerns over top producer Brazil’s drought-hit sugar cane crop.
“There is no objective reason for that level (18 cts) to be lost in the coming months,” said Director General Alain Commissaire.
Helping Cristal Union’s 2021/22 profits will be a rebound in its sugar beet harvest but eventually depend on prices, he said.
Cristal Union plans to pay an average of 27 euros per tonne of sugar beet in 2021, up from 25.5 euros in 2020, and hopes to reach 30 euros “in the near future”, it said.
Commissaire expects earnings before interest, tax, depreciation and amortisation (EBITDA) to rise by 50% this season from 201 million euros reported for 2020/21 and just 63 million a year earlier.
($1 = 0.8223 euros)
