PARIS, June 2 (Reuters) - French sugar group Tereos vowed on
Wednesday to press ahead with plans to cut debt and improve
results but warned that poor sugar output and low margins in the
European starch sector would weigh on earnings in the first half
Tereos, the world's second largest sugar maker by volume,
reported a net loss of 133 million euros ($162 million) in the
year to March 31, against a profit of 24 million a year earlier,
mainly hit by 76 million euros worth of asset depreciations.
Adjusted earnings before interest, tax, depreciation and
amortisation (EBITDA) for 2020/21 rose 11% to 465 million euros,
while net debt at the end of March stood at 2.5 billion euros,
stable from a year earlier.
The group delayed by six months an objective to grow EBITDA
to 600 million to 700 million euros, due in 2021/2022.
"It is clear that these results are insufficient," said
Tereos Chairman Gerard Clay, a longstanding critic of the
previous management, who was elected in December after an
extraordinary board meeting dismissed the chief executive.
Clay said the group would now focus on sugar and ethanol in
Europe and Brazil, where it is one of the leading producers, and
on starch and renewables in Europe.
It aims to achieve by 2024 an EBIT (earnings before interest
and tax) margin of 5%, recurring generation of positive free
cash flow, and a net debt below 2 billion euros.
The 20% cut in the group's debt would be done though
improved positive cash flow and possible divestitures, Tereos
Chief Executive Philippe de Raynal said.
"In a certain number of situations that are not core of the
business, some sale options can be looked at and completed," he
said, declining to give further details.
Sources close to the matter told Reuters that Tereos was in
talks with Singapore's Wilmar International to sell
its stake in their starch joint venture in China, and was
seeking to cease its loss-making sugar activities in Romania.
The previous management's plans to open up the group's
capital to other investors have been dropped, Clay said. "It is
a plan of the past," he told reporters.
($1 = 0.8189 euros)
(Reporting by Sybille de La Hamaide; Editing by Sudip Kar-Gupta
and Jan Harvey)