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Suedzucker Lifts Full-Year Revenue Forecast on Strong Q1 Profit Growth
Summary
The European sugar producer raised its full-year sales guidance after first-quarter operating earnings jumped 41%, driven by lower costs, even as revenue declined due to weaker sugar prices.
Suedzucker (ETR:SZUG) raised its full-year revenue outlook on Thursday after reporting a significant jump in first-quarter operating profit, citing successful cost-reduction measures. The improved guidance comes despite a slight decline in quarterly revenue caused by pricing and volume pressures in its core sugar business.
Earnings Beat Drives Outlook
The European sugar producer announced that its operating earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter rose 41% to €135 million ($154.4 million). The company attributed the strong profit growth to reduced costs.
Based on this performance, Suedzucker now projects full-year revenue to be in the range of €8.1 billion to €8.5 billion. This marks an increase from its previous forecast of €8.0 billion to €8.4 billion.
Sugar Segment Pressures Sales
AdDespite the higher profitability, Suedzucker's first-quarter revenue fell 4% year-over-year to €2.1 billion. The company stated this decline was the result of lower sales volumes and prices in its sugar segment, highlighting a challenging market environment for the commodity.
Operational Update
On the agricultural front, Suedzucker provided a positive update, noting that sugar beet sowing advanced quickly and was mostly successful across its growing regions. "Overall, sugar beet development was good to very good across most regions through early June," the company said in a statement. This suggests a stable outlook for its primary raw material supply.