Südzucker, the Germany-based group specializing in sugar and convenience foods, has issued a profit warning, attributing its forecasted decline to geopolitical factors.
The company anticipates a “significant decline” in its third-quarter earnings, following what it describes as a “modest start” to the current quarter, which commenced in September. Consistent with the previous two quarters, Südzucker expects a decrease in both EBITDA and operating results.
In the third quarter of its 2023/24 financial year, Südzucker recorded an EBITDA of €385 million ($419.8 million) alongside an operating result of €268 million.
In a recent filing to the stock exchange, Südzucker expressed that the ongoing war in Ukraine continues to create “high volatility on the sales and procurement markets.” It noted that the reintroduction of tariffs on sugar imports from Ukraine by the EU in July further complicates the situation. However, the company remains uncertain about “the impact of the negative influences” stemming from the EU’s earlier duty-free import access for agricultural products from Ukraine, which is now volume-restricted.
The company added, “The implications of the war that broke out in the Middle East last October are likewise difficult to assess.” Südzucker plans to release its third-quarter figures on January 14, and emphasized that evaluating the economic and financial ramifications, along with the potential duration of these temporary crises, is quite challenging.
Despite these hurdles, Südzucker has reaffirmed its revenue outlook, expecting group revenues to range between €9.5 billion and €9.9 billion, with EBITDA projected between €550 million and €650 million, and a group operating result estimated between €175 million and €275 million.
