12/11/2020 | Industry, Ingredients, International

Impairment of Südzucker participation ED&F Man

Südzucker illustrated in the half-year report of business year 2020/21 that ED&F Man Holdings Limited, London/UK (Südzucker participation: about 35 %) – as part of its strategic realignment – is focusing on its profitable trading business. The plan is to dispose of various industrial interests outside this core business, for example the sugar mills at the Mexican joint venture Azucar Grupo Saenz, that are weighing on the ED&F Man group’s result. The execution of these measures has been delayed due especially to the coronavirus pandemic, which is why these industrial interests are still negatively impacting the result.

Südzucker assumes that ED&F Man will close the 2019/20 financial year, which ended at the end of September 2020, with a net loss for the year, in particular due to the delay in implementing the strategic realignment. At the same time in September 2020, ED&F Man secured a three-year extension to its existing financing, thereby gaining necessary time for the strategic realignment. Against this background, Südzucker expects significantly negative implications for the group’s at-equity result in business year 2020/21, which is not part of the operating result. The ED&F Man restructuring burden will accrue especially in Südzucker’s third quarter.

Also in this context, the Südzucker AG executive board came to the conclusion – based on the preliminary figures of ED&F Man business year 2019/20 – to significantly impair the ED&F Man participation within Südzucker’s nine-month report of business year 2020/21. Südzucker expects a significant burden to Südzucker Group net earnings in the range of EUR 140 to 180 m (participation value 29.02.2020: EUR 224 m), and to Südzucker AG net earnings in the range of EUR 200 to 240 m (participation value 29.02.2020: EUR 285 m). The burden will be non-cash.