Louis Dreyfus' sugar unit Biosev posts smaller quarterly loss
SAO PAULO Aug 14 (Reuters) - Biosev SA, the Brazilian sugar and ethanol unit of French commodities trader Louis Dreyfus Corp, posted a loss of 148.3 million reais ($65 million) in the April-June quarter, a 54 percent smaller loss than a year ago.
The company is foregoing heavy sales of sugar and ethanol in the near term to try to capture expected improvements in prices for its main products later in the April-March cane season, it said in a market filing of its fiscal first-quarter results that started in April along with the annual cane harvest.
Biosev said it reduced the cost of goods sold by 32 percent to 764.2 million reais over the quarter on an annual basis. It also brought down its financial costs by 64 percent to 87.8 million reais. Net revenues fell however by 14 percent to 911 million reais over the period.
These results reflected the company's decision, like its peers in the cane sector such as Cosan and Sao Martinho, to stockpile sugar and ethanol to capture better returns for delivery later in the season.
Dry weather helped Biosev improved its operational efficiency with a 5.6 percent increase in cane crushing over the quarter, reaching 9.7 million tonnes.
Sugar production over the quarter was up 11 percent at 522,000 tonnes from a year ago, while ethanol production was largely flat at 350 million liters.
Revenue from sugar, however, fell 19 percent to 408 million reais, while revenue from ethanol fell 23 percent to 377 million reais over the quarter, again, as a direct result of the company's decision to stockpile products.
Biosev raised its generation of electric energy over the quarter from burning cane bagasse to 268 gigawatts, an increase of 36 percent annually, in an effort to capture near record prices on Brazil's spot energy market.
Revenues from energy sales jumped 31 percent annually to 82 million reais in the period.
Brazil's main hydroelectric reservoirs are at their lowest levels since 2001 due to drought which has driven spot energy prices to record levels. (Reporting by Reese Ewing; Editing by Lisa Shumaker)
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