(This July 30 story corrects to show Tereos hedged its sugar sales in Brazil, not ethanol)
PARIS (Reuters) - Sugar sales in Europe have been gradually returning to levels anticipated before the COVID-19 outbreak, French sugar group Tereos said on Thursday, while higher prices limited the impact of the lockdown on the group’s activities in the first quarter.
Tereos, the worlds' second-largest sugar producer by volume after Germany's Suedzucker SZUG.DE, has been grappling like its peers with the effects of the coronavirus outbreak, which has rattled global markets and slashed demand for products like ethanol.
Tereos’ adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to 94 million euros (84.92 million pounds) in the first quarter to June 30, up from 33 million in the year-earlier period.
Sales fell 4% on current exchange rates to 967 million euros from 1.0 billion.
The company said its Ambitions 2022 performance plan, which aims to generate over 200 million euros in operating profit, was helping boost its results.
“The continued EBITDA strong growth momentum is supported by the performance gains of our Ambitions 2022 transformation program, increased volumes sold from Brazil, the dynamism of the alcohol segment and sustained pricing in Europe,” Tereos said in a statement.
Despite an estimated 3% drop in EU sugar consumption due to the COVID-19 crisis, Tereos expects the bloc to remain in a sugar deficit over the next year, due to a lower area planted with sugar beet and poor yields, a prospect that has supported EU sugar prices in recent months.
In Brazil Tereos said it should benefit from an expected rise in sugar cane volumes processed and that more than 85% of its 2020/21 sugar export sales had been hedged on global futures markets before the crisis that sent ethanol tumbling on plummeting fuel consumption.
The group’s net debt stood at 2.63 billion euros as of June 30, down 249 million compared with a year earlier but up from 2.56 billion at the end of March.
Reporting by Sybille de La Hamaide; Editing by David Holmes and David Evans
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