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PARIS, Nov 18 (Reuters) - French sugar and ethanol maker Tereos on Wednesday reported a net loss in the first half of 2020/21, while the group’s core earnings more than doubled, helped by a rise in European sugar prices, larger sales in Brazil, and a strong alcohol market.
Tereos, the world’s second-largest sugar producer by volume, has been grappling with low prices after the end of European sugar quotas in 2017 but earnings have been improving as prices rebounded.
“Tereos’ response to the sharp increase in demand for pharmaceutical alcohol and consumer sugars in Europe, the effect of a very good sugarcane campaign in Brazil and the continued recovery in prices in Europe compensated for the activity slowdown in markets affected by the sanitary (coronavirus) crisis,” Tereos said.
The French cooperative made a net loss of 6 million euros ($7.13 million) in the first half of 2020/21 versus a year-earlier loss of 21 million, with net income for the second quarter at 16 million euros.
The group’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 237 million euros from 111 million in the six months to Sept. 30, also helped by performance gains.
The COVID-19 crisis hit both sugar and ethanol demand but consumption had returned to normal, Tereos said. It was still too early to know whether recent virus containment measures in several European countries would have additional effect on 2020 demand.
Adverse weather and pest attacks led to a 23% drop in sugar beet yields compared to the five-year average although the effect of this drop in yields would be partially offset by larger plantings and built up carry-over stocks from the previous season.
Tereos’ net debt at the end of September stood at 2.5 billion euros, down 253 million on the year, the group said.
The group has secured more than 800 million euros in new medium and long-term financing since the start of the year.
$1 = 0.8420 euros Reporting by Sybille de La Hamaide; Editing by Benoit Van Overstraeten and Jane Merriman
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