July 8, 2020 / 6:13 AM / a month ago

CropEnergies expects higher EU ethanol demand as lockdowns ease

HAMBURG, July 8 (Reuters) - Germany’s CropEnergies AG , one of Europe’s largest ethanol producers, said on Wednesday demand for bioethanol is likely to recover as easing coronavirus lockdowns across the region enable more people to use automobiles.

The company has also significantly increased output of ethanol for disinfectants as fuel demand collapsed after lockdowns were imposed.

“CropEnergies expects to see an improvement in the second quarter compared with the first as the operating and mobility restrictions mandated since mid-March 2020 have been eased in more and more countries,” it said. “This should go hand in hand with an increase in fuel demand.”

Germany and other European Union countries require biofuels, including ethanol, to be blended with gasoline to reduce pollution, so falling fuel sales automatically cut ethanol demand.

“CropEnergies has expanded the production of ethanol suitable for disinfectants and contributed to closing supply gaps during the corona pandemic,” it said.

CropEnergies, a unit of German sugar producer Suedzucker , said operating profit in the first quarter of its 2020/2021 financial year to May 31 fell 46% on the year to 8.1 million euros ($9.14 million). Net profit fell 25% to 7.9 million euro and quarterly sales fell 15% to 171 million euros. It had made an advance release of earnings on June 17.

First-quarter ethanol production was unchanged on the year at 208,000 cubic metres, but the company was hit by a fall in European ethanol prices during the quarter.

The company is unable to give a precise earnings forecast for the full year 2020/21 because of uncertainty about the further course of the coronavirus crisis.

$1 = 0.8864 euros Reporting by Michael Hogan; Editing by Rashmi Aich

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