The curse of Ensus, the bioethanol which has already landed private equity groups Carlyle and French banks with big losses, struck at news owners, curbing profit hopes at Germany's Suedzucker.
Shares in Suedzucker, Europe's largest sugar producer, tumbled 6% to a 22-month low of E20.53 in Frankfurt after the German-based group revealed that its operating profits in the March-to-August half had slumped 24% to E425m.
Suedzucker, which blamed this decline on a "significant decrease" in profits at its sugar and special products division, also warned that it could miss its full-year target for operating profits of E825m – this time pinning the blame in part on Ensus, the UK bioethanol plant bought by subsidiary CropEnergies two months ago.
"It is more challenging to achieve this target due to the current cautious business development and effects from the integration of Ensus at CropEnergies," Suedzucker said.
The statement added Suedzucker to the list of companies, including Carlyle Group and French lenders, for which Ensus has brought financial setback.
However, CropEnergies cautioned in July - soon after buying Ensus for £11.6m, a fraction of the plant's construction cost – that the site would represent a short-term setback to profits, cutting its forecast for operating profits in the year to February 2014 to E40m-50m, from E50m-60m.
CropEnergies stuck by that forecast on Monday, as it announced that it was undertaking "final cleaning and optimisation works" at the plant, which the group believes will "make a positive contribution to earnings in the second year after the acquisition".
Suedzucker's comments came as another of its subsidiaries, Austria-based Agrana, also revealed a steep drop in profits, of 24% to E108.0m, in the March-to-August half.
This reflected pressure from "higher commodity prices" in the group's sugar division, a beet processor, and its starch business, which turns corn, potatoes and wheat into products such as industrial starch and bioethanol.
Beet values in some parts of Europe have been underpinned by poor weather at a time when farmers reduced sowings, after a poor price last year, boosting the appeal of other crops.
Germany's DBV farmers' association cautioned a month ago that the domestic crop, which typically challenges the French harvest to the European Union's largest, had suffered from both a "cool, wet spring" and "high temperatures and drought in July and early August".
"It is clear that the large harvest of last year will not be achieved," the DBV said.
Resilient corn prices
An Agrana spokesman told Agrmoney.com that in the group's starch division, "the higher commodity prices have been noted in our main raw materials wheat and corn".
Europe's corn crops have also suffered from some of the same setbacks as beet, prompting a series of downgrades to the EU crop from the likes of Strategie Grains.
Corn values in the port of Hamburg stood last week at E230.00 a tonne, down 10% so far this year, according to the UK's HGCA crop bureau.
US values, as measured in Gulf of Mexico ports, are down 30% to $219.70 a tonne.
Agrana shares, after falling to an 11-month low of E92.80 in Vienna, recovered some ground to close 0.3% lower at E94.26.
Suedzucker shares closed down 3.3% at E21.095 in Frankfurt.