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.
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.
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