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SAO PAULO, June 9 (Reuters) - Brazilian sugar and ethanol producer Biosev SA posted a net loss of 221.7 million reais ($72 million) for the quarter ending on March 31, improved from the 1 billion real loss of a year earlier, the company said in a market filing on Tuesday.
Controlled by French commodities trader Louis Dreyfus, Biosev has struggled to turn a profit in the Brazilian sugar and ethanol milling business for several years, facing harsh droughts and frosts and tight profit margins for sugar and ethanol as it attempts to optimize the use of its industrial capacity to produce sugar and ethanol.
For the crop year ending in March, Biosev posted a net loss of 498.7 million reais, compared with a net loss of 1.5 billion reais the previous season, the company’s results showed.
Biosev said that the results were heavily impacted by income provisions and social taxes.
Net revenues for the fourth quarter that ended in March rose 71 percent to 1.46 billion reais from a year ago, however. Cost of goods sold also rose 79 percent to 896.5 million reais from last year, with most of the increase in costs coming from raw materials.
Biosev’s capital expenditures for the 2015 financial year ending in March were down 6 percent at 1.13 billion reais with the bulk of the cuts in investments coming from the area of industrial capacity expansion.
Brazil’s sugar and ethanol sector has been hard hit by growing debts over the past decade with weak sugar prices and government price controls on fuels taking their tolls on mills’ profit margins.
Net revenue from sugar sales over the 2014/15 year fell 7 percent to 2.1 billion reais, while revenues in the fourth quarter rose 53 percent to 510 million reais over a year ago.
Net revenues from ethanol sales grew a modest 1.5 percent in the year to 1.69 billion reais but surged 46 percent in the fourth quarter to 677.7 million reais.
The group’s sugar production was down nearly 6 percent for the 2014/15 season at 1.62 million tonnes, while ethanol production was hardly changed at 1.15 billion liters.
Sales of biomass electricity from the group’s cogeneration thermoelectric plants that run on cane bagasse grew 26 percent in 2014/15 over the previous period to 896 gigawatt hours. (Reporting by Reese Ewing; Editing by Chris Reese, Bernard Orr)