(Reuters) - Suedzucker (SZUG.DE), Europe’s largest sugar refiner, said on Thursday its second-quarter earnings more than halved and revenues fell as a result of low sugar prices and weaker drought-driven harvests.
The group posted an operating profit of 28 million euros ($31 million) in the second quarter ending Aug. 31, down 54.8% from a year earlier. Quarterly revenues fell to 1.64 billion euros from 1.73 billion euros, the company said.
Suedzucker said in July that trading conditions remained intensely difficult with low sugar prices and no turnaround likely for the company’s current financial year.
The European Union liberalized its sugar market in September 2017, ending its system of guaranteed minimum prices and protected production quotas.
That gave European producers more freedom to expand and export but left them exposed to collapsing world prices as a result of global supply glut, with raw sugar futures hitting a decade low at the end of last year.
Suedzucker’s sugar division made an operating loss of 55 million euros in the second quarter, compared to an operating loss of 6 million euros last year. It said it expected another year of below-average sugar beet yields because of hot and dry summer weather.
The company confirmed its previous forecast for the full year of revenues between 6.7 and 7.0 billion euros and an operating result ranging between 0 euro and 100 million euros. Suedzucker expects the sugar segment’s revenues to decline moderately in 2019.
($1 = 0.9104 euros)
Reporting by Bartosz Dabrowski in Gdansk; Editing by Tomasz Janowski