Germany’s Suedzucker plans to raise its prices “significantly” in order to compensate for the price hike and is preparing to turn to coal as an energy source as Russian gas imports to Western Europe slow after the Ukraine war.
The prices of sugar beet cultivation and energy have witnessed a remarkable increase during the recent period, knowing that they are the cornerstones of the sugar industry, according to the statements of CEO Neil Burxin, and if the company does not raise its prices, its business will hardly achieve profits.
Sud Zucker is currently trying to increase its production in factories where coal can be used, given that not all of the German company’s facilities are equipped to work on energy sources other than natural gas.
Sud Zucker, Europe’s largest sugar producer, has raised full-year guidance and said it expects to pass on price hikes in raw materials and energy to its new customers.
Shares of the company rose 3.4% after forecasting revenue of €8.9-9.3 billion ($9.3-9.7 billion) with EBITDA of €760-860 million and operating results of €400-500 million. Note that the previous forecast was in the range of 8.7-9.1 billion dollars in revenue with EBITDA earnings equal to 660-760 million euros and operating results equal to 300-400 million euros.
Crude sugar futures prices rose to a five-month high during last April and are still about 7% higher compared to June levels last year. Read More [Suedzucker’s Company Annual Profit Rises 40%].