Sugar producer Tereos' profits plummet as prices reach new lows
Tereos is one of the largest sugar producers in the world. The company reported a drop in profit for the first six months of its financial year 2025/26. This reflects the continued weakness of sugar markets, as prices have fallen to multi-year lows due to abundant supplies.
The recurring operating profit for April to September fell 95%, to 16 millions euros. Revenue dropped 19%, to 2.62 billion euro ($3.02 billion), at current exchange rates.
The adjusted earnings before interest tax, depreciation, and amortization (EBITDA), fell by 66%, to 173 millions euros.
In May, the group warned that it would have a tough start to the year as prices continued their decline.
In September, European sugar prices fell to a record low of three years due to high yields from sugar beets, a strong sugar content and a decline in global markets. Tereos starch division also suffered from sharply lower prices.
The price of raw and white sugar futures fell to their lowest level in five years earlier this month, on the expectation that there will be a large global surplus for 2025/26.
The tough economic environment has impacted the sector's earnings, and Suedzucker - Europe's biggest sugar producer - also reported steep declines.
Tereos reported a net loss for the first six months of 2025/26 of 572 millions of euros, which included a goodwill depreciation of 499 million of euro, mainly due to its European Sugar division.
The company stated that a weaker dollar in the period affected Tereos export competitiveness, while supporting imports of ethanol and alcohol.
The Brazilian division of Tereos saw its revenue drop by 28% due to poor weather conditions that reduced sugarcane volume and sugar content.
Tereos anticipates that the euro and dollar will remain low during the second half of the year, which has led it to temporarily increase its forecasted debt leverage for 2025/26 from 5.0x to 6.0x. On September 30, the ratio was 4.5x, with a net debt of 2.1 billion euro up from 2.0 billion one year ago. ($1 = 0.8677 euros) (Reporting by Sybille de La Hamaide Editing by Peter Graff)
(source: Reuters)
