Sugar group Tereos posts record core profit but cautious for 2023/24
Rewrites adding detail, management comments, outlook
By Sybille de La Hamaide
PARIS, June 1 (Reuters) -Tereos posted record annual sales and earnings on Thursday supported by high prices but the French sugar and ethanol group expressed caution regarding the sugar beet crop and strength of demand in 2023/24.
Tight global supplies sent global sugar futures SBc1 to 11-1/2 year highs in April while European prices were reaching record levels.
The company attributed the results to market momentum and an increase in prices across all its segments - sugar, alcohol, ethanol, sweeteners and electricity - strict cost control and well executed hedging strategies.
These factors helped the group, one of the world's largest sugar and ethanol producers, contend with significant increases in raw material and energy prices, it added.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year to March 31 jumped by 62% at current exchange rates to 1.1 billion euros ($1.21 billion).
A further expected rise in sugar prices would support Tereos' business in 2023/24 but it was too early to forecast improved results, incoming Chief Executive Jorge Boucas told Reuters.
"There is a positive trend but there is uncertainty about our customers' sales. We must be careful about consumption which can have an impact on the markets," he said.
The final volume of the European sugar beet harvest which is threatened by delays, pest attacks and weather, also made it difficult to predict the upcoming season, Commercial Director Olivier Leducq said.
French farmers have sown less sugar beet this year, deterred by potential crop damage linked to a ban on a pesticide accused of harming bees. Tereos said in March it would close two factories and sell one as it anticipated a drop in output.
The group's debt, which has been under scrutiny in the bond market, rose to 2.7 billion euros from 2.4 billion euros, Tereos said, citing a sharp increase in working capital.
The group committed to grant 2 euros per share to its cooperative members.
($1 = 0.9084 euros)
Reporting by Sybille de La Hamaide
Editing by David Goodman, Kirsten Donovan
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