Sugar Prices Impact: Suedzucker's Quarterly Profit Drops 85%
The company's sugar segment operating loss of 56 million euros and expected full-year operating loss of 100-200 million euros highlight the significant impact of low EU sugar prices on Suedzucker's performance. As the company navigates the challenging sugar market, its ability to diversify and find new opportunities will be key to its long-term success.
Europe's largest sugar producer, Suedzucker, has reported a significant decline in quarterly operating profit, with an 85% drop to 22 million euros in the first quarter of its 2025/26 fiscal year, down from 155 million euros in the same quarter last year. The company's sugar segment was particularly affected, reporting an operating loss of 56 million euros due to low EU sugar prices.
The decline in profit is largely attributed to the low EU sugar prices, which fell to 540 euros per metric ton in May 2025, partly due to imports of cheap Ukrainian sugar. Suedzucker expects higher EU sugar prices from October 2025 due to reduced EU sugar production, but notes that negotiations on a higher import quota for Ukrainian sugar pose a risk. The company's full-year forecast remains unchanged, with an expected operating profit of 150-300 million euros, down from 350 million euros in the previous year.
Analysts have downgraded Suedzucker's rating to "Sell" due to the challenging sugar market, and the company's stock price has decreased by 1.74% in the past 5 days. Despite the struggles, Suedzucker is exploring new opportunities in the biofuels sector and has a strong presence in the European market. The company warned of weak quarterly results but maintained its annual forecast, citing the ongoing challenges in the sugar market.
As the sugar market continues to face challenges, Suedzucker's performance is likely to remain under pressure. The company's ability to adapt to changing market conditions and explore new opportunities will be crucial in determining its future success. With the EU sugar prices expected to remain low, Suedzucker's struggles are likely to persist, at least in the short term.