PARIS (Reuters) -France’s Tereos on Monday reported a sharp drop in quarterly profit, saying low sugar prices continued to pressure its core business while a weaker dollar exacerbated import competition for its ethanol activity.
Tereos, one of the world’s largest sugar producers, had warned previously that a slide in prices that squeezed earnings in its 2024/25 financial year to March 31 would remain a drag in 2025/26.
Reporting results for its April-June first quarter, the farmer-owned cooperative said adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were 56 million euros ($64.82 million), down 79% from the year-earlier period.
The company posted a net loss of 65 million euros compared with a year-earlier net profit of 108 million euros.
“Lower contracted sales prices in Europe – since Q3 24/25 for sugar and since Q4 24/25 for starch & sweeteners – had an adverse impact on the Group’s first quarter,” Tereos said in a statement, adding this was compounded by lower yields in Brazil at the start of the harvest.
The group maintained its guidance that its net debt versus EBITDA ratio would temporarily peak at around 5.0 during 2025/26, and reiterated that it sees lower anticipated sugar output in Europe in the coming season helping prices gradually recover.
It also said its first quarter is typically its weakest period.
However, a decline in the dollar linked to the wider geopolitical context had also weighed on the group by pushing down prices for sugar exports and ethanol biofuel, it said.
The weaker dollar reinforced the competitiveness of imports of U.S. corn-based ethanol, flows of which into Europe had already been running at record levels, Tereos added.
($1 = 0.8639 euros)
(Reporting by Gus Trompiz; Editing by Kirsten Donovan)
