Linked In
News In
Linked In

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

CropEnergies lifts profits hopes, citing grain market weakness

Twitter Linkedin eCard

Shares in CropEnergies touched a five-month high after the biofuels group, whose portfolio includes the UK's Ensus plant, lifted its profits forecast, despite a dent to revenues from a double whammy of weaker prices and volumes.

The German-based group, which is controlled by sugar giant Suedzucker, said that its revenues in the March-to-May period, the first quarter of its financial year, dropped by 15.2% to E168m.

The decline reflected a drop in volumes, thanks to the closure of the Ensus plant in February last year, besides "lower ethanol prices".

The purchase earlier this month by a consortium comprising Alcogroup, Vanden Avenne Commodities and Vandema of a large Rotterdam ethanol plant from bankrupt Abengoa Netherlands has eased supply concerns in the European market.

Wheat price boost

However, CropEnergies said that its margins were enhanced by weak prices of the grains the group uses to make ethanol.

"Despite the lower business volume, CropEnergies was able to significantly improve the earnings situation due to lower raw material prices and decreased expenditures for energy and maintenance," the group said, revealing that operating profits in the March-to-May period rose by 42% to some E19m.

In March, wheat prices, as measured by Paris milling wheat futures, touched E140.25 a tonne, the lowest for a spot contract since July 2010, with London feed wheat futures falling below £100 a tonne for the first time in nearly five years too.

CropEnergies raised to E50m-80m, from E30m-70m, its forecast for operating profits in the year to February 2017, implying a smaller drop than had been expected from the E87m result achieved last year.

Shares rise

The group also boosted to E640m-700m, from E625m-700m, its full-year revenue hopes, despite the soft start, although that would still leave takings below the E723m achieved last year.

The forecasts exclude any impact of work to improve operations at the Ensus plant, which is due to restart next month.

CropEnergies shares touched E4.988 in early deals in Frankfurt, their highest since January, before easing back to stand at E4.901 in late-morning trading, a rise of 3.2% on the day.

By Mike Verdin

Twitter Linkedin eCard
Related Stories

Evening markets: Soybean futures gain, cotton prices jump on US data

Initial USDA forecasts for crop supply and demand for 2018-19 lift soy and cotton prices, but are not so well received in the cotton market

US soy exports to rebound to record top in 2018-19 - but corn, wheat volumes to fall

The USDA, in much-anticipated forecasts, sees a boost to soybean trade from Argentina’s woes. But corn, wheat exports face strong competition

Demand for US soybeans, soymeal tumbles, as prices soar

US export sales of soymeal hit a 2017-18 low, and those of soybeans turn negative. But in cotton, buyers step in as prices fall

World wheat output to fall this year - but not barley, corn, rapeseed harvests

But corn stocks, like wheat inventories, look like declining over 2018-19, the IGC says, in its first forecast for the grain
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069