Biofuel-producer Cropenergies publishes weak forecast for 2014/15
Mannheim, Germany - With a growth in revenues of 13 percent to EUR 781 (previous year: 689) million, CropEnergies AG, Mannheim, has reached its targets for growth in the financial year 2013/14 (1 March 2013 - 28 February 2014).
As CropEnergies communicated in the ad-hoc announcement in December 2013, bioethanol prices in Europe have significantly decreased not least because of US imports via Norway which circumvent import duties. The failure of the EU to consistently pursue its goal to reduce the amount of fossil fuels used in the transport sector also adds to the current market environment. The continuing discussion in Brussels slows down market growth since many member states hesitate to increase the biofuels share and e.g. introduce E10 into the market. Failing to introducea higher share of biofuels ignores the potential to lower greenhouse gas emissions quickly and cost-effectively.
Bioethanol prices in Europe are currently lower than the ones in the large bioethanol countries Brazil and the USA. Even more, bioethanol is cheaper than petrol in Europe. Due to the fact that grain prices have developed a side trend while bioethanol prices have started to decrease, the earnings situation of European bioethanol producers has significantly worsened. As a result, CropEnergies expects the consolidation of the industry to continue but, as a leading producer, is well prepared for this difficult time.
The high volatility of bioethanol prices makes the outlook for the financial year 2014/15, which has started in 1 March 2014, more difficult. Due to the growth in production capacity, a further increase in revenues to EUR 850 million is expected. From today's point of view, CropEnergies expects the EBITDA to reach EUR 10 to 60 million. After depreciation, this should result in an operating profit/loss of EUR minus 30 to EUR plus 20 million.
Source: IWR Online, 08 Apr 2014
