MANNHEIM (dpa-AFX) - Südzucker has recorded a significant drop in profits in the first quarter. This was mainly due to higher production costs and lower prices in the sugar business, as the company announced in Mannheim on Thursday. However, the results of the biofuel subsidiary Cropenergies also declined due to falling prices for ethanol as well as food and animal feed.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) therefore fell by more than a third year-on-year to 230 million euros in the three months to the end of May. Operating profit even slumped by 45 percent to 155 million euros. Turnover increased slightly by 1.3 percent to 2.55 billion euros.

Südzucker had already warned of significantly falling profits in the first quarter, but the figures now presented were even below analysts' expectations. The market therefore reacted with disappointment. The SDax-listed share lost more than 4 percent in the morning. Analyst Oliver Schwarz from Warburg Research criticized the development of the sugar business in particular. The profitability of the most important division had weakened more than feared. Overall, he described the start to the year as "weak".

There is no improvement in sight for the time being. The sugar company had already announced further declines for the second quarter on Wednesday and spoke of a "subdued start". The sales and procurement markets remained increasingly volatile due to the war in Ukraine. The further course of the burdens caused by the EU's extension of duty-free access for agricultural imports from Ukraine, which is now limited in terms of volume, remains uncertain. In addition, the effects of the war in the Middle East are difficult to assess.

In the second financial quarter, EBITDA and the operating result are likely to be below the previous year's figures of 383 million and 310 million euros. However, Südzucker had confirmed its forecast for the current 2024/25 financial year and continues to expect declining profits.

Group revenue in 2024/25 (as of the end of February) is expected to be between EUR 10.0 and 10.5 billion, EBITDA between EUR 900 million and 1.0 billion and consolidated operating profit between EUR 500 and 600 million./nas/mis/jha/