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| FACTS: Royal Cosun expects 2011 net profit to be €115m (2010: €109m). |
| ANALYSIS: For what is predominantly a sugar beet processor, the net profit out-turn might be considered surprising given the sharp uptick in EU sugar pricing through 2011. However, the co-operative has instead passed on almost all of its improved trading performance to its members in the form of a higher beet price. |
| Cosun will pay €55.69 per tonne of quota sugar beet delivered in the 2011/2012 campaign. This is a 29.5% increase year-on-year (yoy). |
| Suiker Unie (sugar) was reported to have “turned in an excellent result….high prices on the world market and scarcity on the European market led to firmer selling prices….”. The recent harvest campaign closed successfully in mid-January and lasted 130 days. |
| Its non-sugar operations, ranging from starch to inulin to fruit/vegetable concentrates, also performed well yoy. |
| DAVY VIEW: The percentage increment in payments to beet farmers for quota sugar is broadly similar to that seen in Austria (+33%) and a little lower than in southern Germany (+40%). It is clear that the upturn in sugar profitability has been shared across all stakeholders. The supply/demand situation in European quota sugar still remains tight; this bodes well for annual contracting, beginning in mid 2012, for the 2012/2013 marketing year. |