SAO PAULO, June 18 (Reuters) - Net profit at Brazil’s Copersucar SA, the world’s largest sugar and ethanol trader, nearly doubled in the financial year ended on March 31 despite losses related to a fire that destroyed its Santos export terminal.
The company reported a net profit of 157.7 million reais ($70 million) for fiscal 2013/14, up 82 percent from the previous crop year, as it took advantage of sharp swings in prices, according to an earnings release published in the financial newspaper Valor Economico on Wednesday.
Net revenue rose 57 percent to 23.15 billion reais.
In an interview with the paper, Chief Executive Officer Paulo Roberto de Souza said intense volatility in the price of sugar and ethanol during the first half of the fiscal year was decisive to the company’s performance.
“When sugar fell to 15.30 cents/lb, our read of the market was that there would be a recovery (in price). We established a long position and were right, as the price rose to 18 cents/lb,” Valor quoted Souza as saying.
The company shipped 8.6 million tonnes of sugar during the year, up 10.3 percent from the year earlier but shy of its 9 million tonne target.
The growth in Copersucar’s shipments came despite an October fire that gutted most of its 10-million-tonne sugar export terminal at the port of Santos. The company has since restored almost half of the terminal’s pre-fire capacity.
Copersucar estimated that the fire has caused it losses of 130 million reais so far that are not covered by insurance, as it pays for clean-up, rebuilding and added logistical costs due to increased use of truck transport and third-party export capacity.
Copersucar’s ethanol shipments rose 9 percent to 4.9 billion liters in Brazil, but in the U.S. market they rose by 31 percent to 6.9 billion liters due to trading by 65-percent-owned U.S. subsidiary Ecoenergy.
“It was the first complete crop year with the results of Ecoenergy, which was twice as great as we had expected when we bought control of it in late 2012,” Copersucar Chairman Luis Roberto Pogetti said.
Ecoenergy benefited from harsh weather on the U.S. East Coast that caused interruptions in the supply chain, doubling the price of the biofuel to $4 a gallon from $2 in the first quarter of 2014.
Copersucar is controlled by a consortium of about 45 sugar and ethanol mills, led by the largest shareholders in the trader Grupo Virgolino Oliveira, Zilor Energia e Alimentos and Pedra Agroindustrial.
Copersucar struck a deal in March with U.S. agricultural trading giant Cargill to form an international joint venture that would create a new world leader in sugar trading. The merger is expected to be approved by regulators later in 2014.
For 2014/15, it projects investments of 169 million, with the bulk going to completion of a Brazilian ethanol pipeline, Logum Logistica, in which Copersucar is a principal shareholder, and a fuel terminal in Paulinhia, Sao Paulo. (Reporting by Reese Ewing; Editing by Peter Galloway)