The improvement was due principally to Aviko’s strong operating profit on the one hand and the slow recovery in sugar prices at the end of 2019 after dipping to a low during the year. Thanks to the more favourable figures, the price Cosun paid to its growers for their beet was higher than in the previous year and more than projected at the beginning of 2019.
Preliminary results for 2019
Consolidated turnover amounted to € 2,046 billion, the same as in 2018. Suiker Unie was confronted with weaker sugar prices in combination with lower volumes, both inside and outside Europe. Aviko saw a strong increase in its turnover. Duynie and Sensus’s turnover was higher, SVZ’s was lower. The operating profit before the members’ bonus rose from € 17 million in 2018 to € 64 million in 2019. The operating profit before depreciation, amortisation and the members’ bonus (EBITDA) rose from € 146 million in the previous year to € 182 million. The members’ bonus distributed to the growers amounted to € 39 million (2018: € 14 million).
Suiker Unie saw a gradual increase in European sugar prices at the end of 2019. Disappointing harvests for the year again meant less sugar was produced in Europe. This explains the upward trend in selling prices. Suiker Unie’s result for the year was accordingly better than expected, thanks in part to favourable bioethanol prices. The higher sugar prices also fed into the contracts negotiated for 2020. In combination with continuous cost control, Suiker Unie expects to return to profit in 2020 after incurring losses in the previous two years.
Aviko achieved its highest operating profit ever in 2019. The limited potato harvest in 2018 lifted selling prices to a higher level. Aviko also benefited from the growing global demand for frozen fries and potato products. Demand is rising by about 4% per annum on the back of greater worldwide prosperity. Aviko Rixona is benefiting from the higher global demand for potato snacks. To continue to meet the demand, Aviko is building a new factory in Poperinge, Belgium, to produce frozen fries and potato flakes. Another investment for profitable growth is the acquisition (90%) of the Chinese fries manufacturer Hongyuan Louis, which is expected to be completed in the first half of 2020. Aviko is looking to the future with confidence.
Sensus reported higher turnover and a slightly firmer result for the year despite the pressure exerted on its margins by increased competition. Supply of inulin in its markets has been brought more into line with demand and there is potential for higher prices. This is a good position for contract negotiations in 2020, particularly with a view to the stricter quality criteria and rising costs.
SVZ had a disappointing year in 2019. Harvests in Europe did not meet expectations. As a result, the cost of some product groups increased while selling prices remained flat. Margins were accordingly squeezed. In the US, SVZ suffered operational setbacks. In 2020 the group will concentrate on strengthening its operating profit, with attention for all the links of sustainability in its supply chain.
Duynie Group saw an increase in both its turnover and operating profit in 2019. All its business units reported growth and strengthened their market positions. Turnover of Duynie Feed increased, amongst others by a new sales office in Poland. AgriBioSource (ABS) in Denmark got off to a successful start supplying fermentation feedstock to produce energy. Novidon benefited from higher prices prompted by a shortage of potato starch in the market. Duynie Ingredients in Cuijk will take its climate neutral factory into service in the course of 2020. By meeting the growing demand for high quality dried ingredients for pet food and animal feed, the factory will provide an extra impulse for Duynie Ingredients’ strong growth.
Beet price higher in 2019 than in the previous year
The price paid for sugar beet of average quality supplied during 2019 amounted to € 36.05, in comparison with € 35.59 in 2018. This modest increase was the net outcome of a higher members’ bonus of € 6.50 (2018: € 2.25) and the beet’s lower sugar content and sugar extraction rate. The dry summer and wet autumn reduced the average sugar content from 17.4% in 2018 to 16.3% in 2019. The price per tonne of quota beet of standard quality (sugar content of 17% and extractability rate of 91) amounted to € 39 per tonne (basic price of € 32.50 plus € 6.50 members’ bonus). The standard beet price in 2018 had been € 34.75 (basic price of € 32.50 plus € 2.25 members’ bonus).
The price paid for surplus beet of standard quality amounted to € 25 per tonne (2018: € 30) and the price paid for beet of average quality was € 23.11 (2018: € 30.72) per tonne.
In the Netherlands, the sugar yield per hectare in the 2019 season came to 13.7 tonnes (2018: 13.2 tonnes). The average financial yield per hectare earned by the growers came to € 2,930 per hectare (2018: € 2,666).
The table below shows the estimated volume of the sugar beet supplied and processed and the beet sugar produced in the Netherlands for 2019 in comparison with 2018 (between brackets).
|Beet processed||[in tonnes]||6.779.041||(6.555.683)|
|Sugar content||[in %]||16,3||(17,4)|
|Beet sugar production||[in tonnes]||1.098.000||(1.103.435)|
The figures in this press release have not been audited by the external auditor. This press release is not an announcement within the meaning of Book 2, article 395, paragraph 2 of the Dutch Civil Code. Cosun will publish its definitive figures for 2019 on its website, www.cosun.nl, in April.
Breda, 13 February 2020