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Cosun shows good results in 2014

12 February 2015
Royal Cosun achieved a good result in 2014. Compared to 2013 the Suiker Unie result declined due to significantly lower sugar prices. The result of the other activities is higher than in 2013. In 2015 Cosun expects a lower result due to the declined sugar prices.
 
 

2014 preliminary results
Consolidated turnover declined slightly to €2.1 billion (2013: €2.2 billion). Cosun’s operating profit dropped to €110 million (2013: €172 million). Net profit is projected at €79 million. In 2013 this was still €139 million.
 
The two preceding years were excellent for Cosun. Despite the significantly lower sugar prices 2014 nonetheless became a good year. Large quantities of sugar were sold in 2013 when the sales prices were higher. In the course of the financial year the sugar prices dropped to a very low price level. In 2015 this will result in a further decline of the result in sugar.
2014 is a historically good year for both the cultivation and processing of beet. The average sugar yield per ha eventually exceeded 15 tonnes, the Dutch sugar factories never processed this many beet and operated perfectly during the entire campaign.
 
Aviko realised a good result thanks to the further increased sales, better capacity utilisation in the factories and higher margins with lower costs for raw materials. In addition the specialities share increased again. Aviko acquired a majority interest in a speciality factory in Southern Germany and in a French fries factory in China.
Rixona (granulate and flakes) performed well in 2014. On balance the Aviko group strongly improved its result compared to 2013.
 
Inulin manufacturer Sensus recorded a higher turnover in 2014 and is growing faster than the market. The higher costs for raw materials did put pressure on the result.
 
SVZ shows comparable results as those in 2013. The sales increased slightly whilst the turnover decreased somewhat. Due to shifts in the product mix (relatively more vegetables and less red fruit) the stability of the result improved. Vegetable juices are on the way up as well as the demand for natural colouring agents.     
 
Duynie group did well in fodder despite the declining prices in 2014. Ample supply was available as a result of which the sales prices came under pressure. The integration of two acquisitions (in 2013 and 2014) was completed successfully. Starch processor Novidon did, however, have a difficult year due to competition, mostly by wheat starch.

President & CEO Robert Smith said: “We anticipated the increasing price fluctuations, mostly in sugar, and they will put pressure on our result in 2015. These developments confirm our strategy of wanting to grow in order to strengthen our profitable activities, also in sugar. We therefore continue our investments  unabatedly.”
 
Development and innovation
Cosun wants to keep growing, in the existing activities and in new activities with which our vegetable raw materials can be further capitalised. An example is the production of green gas in biomass fermenters at the three sugar factories. The activities of Cosun Biobased Products specifically focus on the development of new products and applications. For instance the inulin derivative CMI for detergents, and microfibers from beet pulp for use in, for example, coatings.
 
Each business group is, however, engaged in new developments. In this area they are supported by the professionals of the in-house Cosun expertise centre for research and development in Roosendaal, CFTC. Based on the ambition of Cosun to grow, also through innovation, it was decided to build a new innovation centre at the premises of Agro & Food Cluster Nieuw Prinsenland in order to further enhance the expertise in the area of process and product innovation. It is expected that the move can still take place before the 2016 summer holiday.
 
2014 beet price
The beet price consists of a minimum EU price, the members’ bonus, and the sugar content and other payments. The price for quota beet supplied during the 2014 campaign is €50.18 per tonne (2013: €67.26), at an average extractability and an average sugar content.
 
The early sowing date and favourable weather conditions contributed to the high average sugar yield per ha. For the first time ever the threshold of 15 tonnes of sugar per ha was exceeded. An excellent performance of the beet growers. The excellent campaign during which 6.6 million tonnes of beet were processed at the Dinteloord and Vierverlaten factories within 135 days also contributed to this. Despite the lower beet price, the average financial yield per hectare in 2014 thus arrived at a good end result for the grower of €4,354 (2013: €4,917).
 
The following table shows the Dutch beet harvest and beet sugar production for 2014 compared to that of 2013 (in brackets):
 
Processed beet [in tonnes] 6,866,000 (5,734,000)
Sugar content beet [in %] 16.7 (16.9)
Extractability [index] 91.2 (91.1)
Total sugar production [in tonnes] 1,125,000 (948,000)
 
Due to the extensive beet harvest and high sugar production approximately 170,000 tonnes of sugar are passed on with which the first quota sugar of the next campaign has already been produced.
 
In the course of March Cosun will publish its definite figures for 2014 on the website www.annualreport-cosun.com.