Suedzucker Posts Profit Without EU Sugar Reform Costs

(Bloomberg) -- Suedzucker AG, the world’s biggest sugar processor, reported a third-quarter profit compared with a loss a year earlier as costs related to European Union industry reforms weren’t repeated.

Net income was 25.5 million euros ($33.9 million) in the three months through November, compared with a 36.4 million-euro loss a year earlier, the Mannheim, Germany-based company said today in a statement on its Web site. Suedzucker reiterated its forecast that operating profit for the fiscal year through February may gain 12 percent to 260 million euros while sales will rise as much as 3.8 percent to 6 billion euros.

The EU has sought to shrink its sugar industry since being barred in 2005 from exporting surpluses. Competitor Associated British Foods Plc last month predicted a “more stable” market after sugar companies in the EU gave up production quotas.

“We expect the strong recovery in the sugar segment to continue,” Alexander Stiehler, an analyst at UniCredit Markets and Investment Banking in Munich who advises buying Suedzucker stock, wrote to clients before the figures were released. “Price pressure on sugar is easing now that the market is nearly balanced.”

Suedzucker rose 23 cents, or 1.8 percent, to 12.75 euros as of 9:01 a.m. in Frankfurt. The stock has dropped 9.7 percent in the past year, valuing the company at 2.3 billion euros.

Third-quarter sales advanced 2.5 percent to 1.57 billion euros, said Suedzucker, which is controlled by almost 30,000 German sugar-beet farmers and traces its history back to 1837.

The EU imposed a levy on regional sugar companies to help fund the industry changes after the World Trade Organization said growers could no longer export surpluses. Suedzucker renounced about a fifth of its own production quota.

Suedzucker has investments including a 71 percent stake in CropEnergies AG, operator of Europe’s largest bioethanol plant, which raised its annual sales forecast yesterday after third- quarter revenue more than doubled.