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Suedzucker H1 Operating Profit, Revenues Down; Backs FY19 Forecast - Quick Facts

German sugar producer Suedzucker AG (SUEZF.PK) reported Thursday that its first-half operating result declined 46.6 percent to 74 million euros from last year's 139 million euros.

The expected drop was mainly driven by the sugar segment losses. The decline reported by the fruit segment was more than offset by improved results at the special products and CropEnergies segments.

The sugar segment's operating loss was 93 million euros, compared to last year's profit of 3 million euros. The main causes were the EU sugar market price level, which did not cover costs, and sharply lower sales volumes due to the drought-driven weaker 2018 harvest.

CropEnergies' operating result tripled to 44 million euros from previous year's 14 million euros, driven by sharp improvement in ethanol sales revenues.

For the first half, Südzucker recorded consolidated revenues of 3.31 billion euros, down from 3.48 billion euros a year ago. The sugar segment's revenues fell sharply, and the fruit segment's revenues dropped slightly, partly offset by higher revenues of special products and CropEnergies segments.

The sugar segment's revenues decline was driven by low sales revenues and significantly lower volumes due to the reduced 2018 harvest.

CropEnergies' revenues rose to 405 million euros from last year's 349 million euros.

Looking ahead for fiscal 2019, Südzucker continues to expect consolidated group revenues of 6.7 billion euros to 7.0 billion euros, compared to previous year's 6.8 billion euros.

The company anticipates the sugar segment's revenues to decline moderately. In the CropEnergies segment, revenues are now expected to range between 740 million euros and 780 million euros, compared to previous forecast of 740 million euros to 820 million euros.

The consolidated group operating result is still expected to range from 0 to 100 million euros, compared to previous year's 27 million euros.

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