Tereos surfs the sugar wave and increases Brazil profit by 1300%

While the French cooperative Tereos faced difficulties last year with the pandemic and productivity in Europe and recorded a loss, its subsidiary in Brazil, which is the second-largest in global sugar production, showed a positive performance in the 2020/21 harvest.

Tereos Açúcar e Energia Brasil took advantage of the higher prices of the commodity in reais and the increase in sugarcane crushing to multiply by 13 its profit compared to the previous season, to R$ 212 million, reducing the weight of its debt.

However, the gains obtained in Brazil ended up being diluted in Tereos’ global balance, presented in euros, due to the devaluation of the real, which fell 37% against the dollar in the harvest. The adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of the unit in Brazil grew 47%, to R$ 1.764 billion, but only represented 38% of the group’s global Ebitda. Revenue, in turn, reached R$ 4.4 billion, an increase of 38%.

See the DataLiner chart below for a history of Brazilian sugar exports by Tereos since 2018.

Brazilian Sugar Exports (HS 1701) by Tereos | Jan 2018 to Mar 2021 | WTMT

Graph source: DataLiner  (To request a DataLiner demo click here)

In Brazil, however, the exchange rate fluctuation ended up being an important driver of better remuneration for sugar destined for export. The company exported 1.2 million tons of sugar from Brazil, two-thirds of its production. Of the total sugarcane processed by the company, 62% was used for sugar production, above the average of 46% for the midwest-south region.

The pandemic and its initial effect on consumption – which was felt in the country but marginally in the sector – was circumvented with exports, according to Pierre Santoul, CEO of Tereos Açúcar e Energia and CEO of Tereos Brasil.

From the volume of sugar initially expected for retail sale, Tereos redirected 100,000 tons for export. In the ethanol market, which was most affected in the first months of the pandemic, Tereos also found the foreign market as an alternative, where it directed 10% of sales.

Source: Valor Econômico

To read the full original article, access the link below:

https://valor.globo.com/agronegocios/noticia/2021/06/17/tereos-surfa-a-onda-do-acucar-e-lucra-13-vezes-mais-no-brasil.ghtml

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