Germany's second largest sugar refiner Nordzucker reported reduced losses on Wednesday and said it hopes to return to profit in its new financial year as easing coronavirus lockdowns stabilise sugar prices and demand.
Following benefits from cost-cutting and efficiency programmes, Nordzucker posted a 15 million euro ($16.4 million) net loss for its 2019/20 financial year to end-February against a loss of 36 million euros in the previous year.
"Due to the (lockdown) easing, we currently expect that the impact of the corona pandemic on demand in the EU will be relatively small and that prices will remain largely stable," CEO Lars Gorissen said in a statement.
"Our clear objective is to return to positive results in the current financial year."
Unlisted Nordzucker in 2019 completed its takeover of Australia's second largest producer, Mackay Sugar, expanding into Asia and the cane sugar market.
"We assume that sugar consumption will continue to grow worldwide once a corona-related decline has been overcome, and are pursuing the goal of further expanding our cane sugar activities," Gorissen said.
Gorissen told Reuters separately that the company is considering expansion in other cane sugar production regions, possibly including South America and Africa.
But this would be longer term as Nordzucker is currently concentrating on integrating Mackay Sugar, he said.
Competition restrictions and distortion to competition make expansion possibilities in the EU "relatively limited," he said.
Nordzucker, mainly owned by German sugar farmers, said European demand for sugar products in the retail sector "skyrocketed" in March as the coronavirus crisis triggered panic buying, but the company was able to fulfil the demand increase.
"Afterwards, demand in the retail sector fell to a below-average level, but a normalisation can be expected," it said.
Nordzucker said sugar production in 2019/20 increased slightly to 2.49 million tonnes from 2.40 million tonnes in the previous year.
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