The Mannheim-based SDAX company Südzucker can look back on a successful business in the third quarter (end of November). With an increase of almost nine percent to 2.7 billion euros compared to the previous year, the company recorded strong sales.

Also pleasing is the increase in operating profit by just under 22 percent to 268 million euros. The important sugar division of the company had already announced in mid-December that it would significantly exceed the previous year's value of 220 million euros, thanks to good sugar prices.

The sugar business sector is currently the biggest driver of Südzucker, as high sugar prices can be achieved despite declining quantities. Although the harvest was bad in 2022 according to company reports, this led to attractive prices in the first nine months of the fiscal year.

Currently, the price level of the ongoing sugar marketing year 2023/24 is at the same level as the previous year period, as announced by Südzucker.

Specialty division of Südzucker also recorded a significant increase in earnings in the third quarter, thanks to higher sales prices. The company offers frozen pizzas, among other products, as well as raw materials for food and packaging.

In the biofuel subsidiary CropEnergies, however, things are not going well as ethanol prices are falling again after a sharp increase in energy prices in 2022 and are currently at a two-year low. In addition, high import quantities are burdening the business.

To strengthen the area, Südzucker announced shortly before Christmas to acquire the remaining shares of its subsidiary Cropenergies and subsequently delist it from the stock exchange. Currently, the company already owns nearly three quarters of the shares.

Net profit for Südzucker shareholders amounts to 163 million euros, representing an increase of over 17 percent compared to the previous year. The financial forecast for the current fiscal year (ending in February) has been confirmed by the Mannheim-based company.

Strong fluctuations in the stock price of Südzucker were observed during the course of trading on Thursday. Following the announcement of preliminary financial figures, the shares moved between a decrease of 3.7 percent and an increase of 1.3 percent.

Ultimately, the course ended with a decrease of 0.50 percent at 14.06 euros. The course of Südzucker has been in a downward trend for the past months, after the stock reached a high of nearly 19 euros in May 2023.

According to analyst Oliver Schwarz from Warburg Research, Südzucker's quarterly results remained largely unsurprising. In an initial assessment, he wrote: "The quarterly results have largely remained without surprises".

Regarding the upcoming telephone conference of the sugar producer, analyst Alex Sloane from Barclays referred to the statement that it will be more difficult to achieve the forecasted operating profit for 2023/2024. The reason for this is the statements made by the ethanol subsidiary Cropenergies about lower prices.

Furthermore, the company expects an increase in sugar production costs in the fourth business quarter, which could decrease the profitability of the sugar division in the upcoming quarters.