Nordzucker Post - 3 July 2020
Annual financial statements 2019/20: Loss lower than expected
Nordzucker published the current annual report at the annual press conference. The loss was lower than expected, in particular due to cost reductions. Although the corona crisis makes the outlook more difficult, a positive result in the current year remains realistic.
Nordzucker closed the 2019/20 financial year with a slight increase in revenues and an operating loss that was significantly lower than the previous year’s loss and lower than expected. The repositioning of the sales strategy, the significant streamlining of the organisation and comprehensive permanent cost reductions have contributed to the improved results. The 70 per cent majority stake in Australia’s second-largest sugar manufacturer, Mackay Sugar Ltd. (MSL) was consolidated for the first time and made a positive contribution. A positive result for Nordzucker AG in the current 2020/21 financial year remains realistic despite uncertainties arising from the corona crisis.
In the 2019/20 financial year (closing date 29 February) Nordzucker achieved group revenues of EUR 1,439 million, 6 percent above the previous year (EUR 1,354 million). Operating profit (EBIT) was minus 15 million euro (previous year: minus 58 million euro). The financial year ended with a net loss of minus 15 million euro (previous year: minus 36 million euro). For the second year in a row, no dividend payment will be proposed to the Annual General Meeting.
Outlook: Challenges from Corona Pandemic
Sugar prices on the world market and in the EU had recovered during the past financial year. The reasons for this were declining production in Europe and the expectation of a global deficit. However, the corona pandemic has created completely new conditions on the world market since the beginning of March. Together with the massive drop in oil prices, sugar prices collapsed. Brazil is now partially switching from bioethanol to sugar production, which is expected to result in higher export volumes on the world market.
In Europe, the demand for sugar products in the retail sector skyrocketed in March 2020, triggered by “hoarding”.
Thereafter, retail demand fell to below-average levels, but is expected to normalise.
“We were able to meet the sudden increase in demand in all our countries. Many of our customers have expressly thanked us for this,” reports Dr. Lars Gorissen, CEO, and continues: “Due to the easing, we currently assume that the impact of the corona pandemic on demand in the EU will be relatively small and that prices will remain largely stable. Our clear objective is to return to positive results in the current financial year”.
You can find our annual report here.