Tereos Warns of Further Challenges After H1 Profit Decline

French sugar producer Tereos, one of the world's largest sugar manufacturers, reported an 18% drop in net profit for the first half of its fiscal year, falling to €196 million. Revenue decreased by 11% to €3.2 billion, while adjusted EBITDA declined by 15% to €506 million. The main reason cited was lower sugar and sweetener prices in European markets.

Key Points:

• Low Sugar Prices: Sugar prices in Europe fell from €700/ton last year to approximately €450/ton, driven by high imports (primarily from Ukraine) and increased sugar beet cultivation.
• Outlook: Tereos expects weaker results for the second half of the fiscal year as price declines continue.
• Looking to 2025: European producers have indicated a possible reduction in sugar beet acreage next year, which could stabilize the market.
• Brazil: Fires in Brazil affected 6% of Tereos' sugarcane fields but had a limited impact on harvests.
• Debt: The company reduced its net debt to €2 billion (down from €2.4 billion in March 2024).

Other European producers, such as Südzucker, are facing similar difficulties. The European sugar market remains under pressure due to oversupply and declining prices.