France: strong sugar prices help Tereos offset high production costs

French sugar group Tereos reported strong first-half results on Tuesday, including a net profit and a sharp rise in earnings, as high sugar and ethanol prices helped offset an increase in production costs.

Tereos, the world's second largest sugar maker by volume, posted a net profit of 133 million euros in the year ended September 30, 2022 as compared to with a year-earlier loss of 50 million euros, helped by higher prices that compensated for a sharp rise in energy and raw materials costs.

Over the same period, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 132% to 464 million euros.

In a presentation to bond holders the group said it expected strong results at its sugar Europe branch to continue in the second half due to higher selling prices reached in its annual fixed-price contracts for B2B sales.

In Brazil, where Tereos is among the largest sugar and ethanol producers, the group should benefit from expected high prices and a higher sugarcane crushing volume, at 17.3 million tons, up from 15.6 million tons in 2021.

Tereos's decision to hibernate a plant in Brazil to maximize its margins amid lower yields led to a fall in daily production capacity but full year 2022/23 output and sales volumes were still expected to rise above 2021/22, it said.

The group's net debt fell 128 million euros from a year earlier and 131 million euros from the end of the first quarter on June 30 to 2.24 billion euros.

However, Tereos expects its net debt at March 31, 2023 to be higher than at March 31, 2022 as higher costs led to a rise in working capital.

Tereos said in October it would raise the price at which it will buy sugar beet from its members by 40% from last year.

The group anticipated its sugar processing season by about a week ahead of possible energy restrictions this winter if Russia cuts off gas supplies.

Tereos did not announce the name of a new managing director following the departure of Ludwig de Mot late September this year, the third chief executive to leave the group in two years. Pending recruitment, Gerard Clay will continue to perform the role in his capacity as Chairman of the Board of Directors, it said.

 

US exports over 100 million gallons of ethanol

The United States exported 101.48 million gallons of ethanol and 1.01 million metric tons of distillers’ grains in June, according to data released by the USDA Foreign Agricultural Service on August 04. Exports of both products were up as compared to June 2021.

Ethanol is an organic chemical compound. It is a simple alcohol with the chemical formula C₂H₆O. Its formula can be also written as CH ₃−CH ₂−OH or C ₂H ₅OH, and is often abbreviated as EtOH. Ethanol is a volatile, flammable, colorless liquid with a characteristic wine-like odor and pungent taste.

Ethanol is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration. It has medical applications as an antiseptic and disinfectant. It is used as a chemical solvent and in the synthesis of organic compounds, and as a fuel source. Ethanol also can be dehydrated to make ethylene, an important chemical feedstock.

The 101.48 million gallons of ethanol exported in June was down when compared to the 147.06 million gallons exported in May, which was a four-year high, but up from the 82.09 million gallons exported during the same month of last year.

The US exported ethanol to more than 30 countries in June. Canada was the top destination for US ethanol at 41.2 million gallons, followed by South Korea at 13.64 million gallons and the UK at 12.02 million gallons.

The value of US ethanol exports was at US$324.77 million in May, down from US$410.39 million a month ago, but up from US$187 million in June 2021.

Total US ethanol exports for the first half of 2022 reached 827.39 million gallons at a value of US$2.25 billion, compared to 662.62 million gallons exported during the same period of 2021 at a value of US$1.27 billion.

The 1.01 million metric tons of distillers’ grains exported in June was up from both 966,108 metric tons in May and 938,280 metric tons in June 2021.

The US exported distillers’ grains to approximately three dozen countries in June. Vietnam was the top destination at 197,192 metric tons, followed by Mexico at 158,501 metric tons and Turkey at 109,819 metric tons.

The value of US distillers’ grains exports was at US$311.08 million in June, down slightly from US$311.85 million the previous month but up from US$248.47 million in June of last year.

Total US distillers’ grains exports for the first six months of the year reached 5.67 million metric tons at a value of US$1.67 billion, compared to 5.4 million metric tons exported during the same period of last year at a value of US$1.42 billion.