CropEnergies off to a very good start in the 2022/23 financial year

The main reason for the exceptionally good results was price hedging for raw materials and energy, that had already been entered into prior to the start of the Ukraine war and the associated sharp rise in raw material and energy prices. However, the positive impact on earnings of these early hedging positions will weaken noticeably in the coming months.

The European Parliament and the Council are currently discussing a renewed increase in the targets for renewable energies. At the end of June 2022, the EU member states agreed on a common position that essentially corresponds to the proposals of the EU Commission. According to this, the share of renewable energies in the EU is to increase to at least 40 percent by 2030. With regard to CO₂ limits for passenger cars, the EU member states are in favor of an extensive ban on new vehicles with internal combustion engines from 2035. While CropEnergies welcomes the EU's more ambitious targets in principle, it rejects a de facto ban on new vehicles with internal combustion engines. Dr Stephan Meeder, CEO CropEnergies AG: "This is a clear violation of the principle of technology openness and technology neutrality. Once again, only the emissions at the exhaust of the vehicles are taken into account. Lifecycle emissions from vehicles with no local emissions, such as electric cars, are completely ignored. Emissions from the manufacture of the batteries are not included, nor are those from the charging current used." It now remains to be seen what the final agreement between Parliament and Council will be. But it is already feared that the regulation will not be open to all technologies and thus will not take into account the fact that different drive and fuel options will be needed for a long time to come in order to achieve the climate targets in the transport sector or to meet the various mobility needs.

On 15 June 2022, CropEnergies had raised its outlook for the 2022/23 financial year. Revenues of EUR 1.45 to EUR 1.55 billion (previous year: EUR 1.08 billion) and an operating profit of EUR 165 to EUR 215 million (previous year: EUR 127 million) are expected. This corresponds to an EBITDA of EUR 205 to EUR 255 (previous year: EUR 169) million. The outlook is based on the assumption of a normalization of mobility behavior. However, the impact of the Ukraine war on sales, energy and raw material markets remains difficult to assess. From today's perspective, CropEnergies generally assumes that sufficient energy and raw materials will be available for the production of renewable ethanol as well as food and animal feed products.

In this context, CropEnergies also assumes that the declaration of the gas emergency plan alert level in Germany will not have a significant negative impact on prices. Furthermore, it is expected that the EU member states will essentially maintain their blending targets for biofuels and that this will continue to enable high capacity utilization. In addition, CropEnergies expects that increased energy and raw material costs can be at least partially offset by higher sales prices for ethanol as well as for food and animal feed.

The full report for the 1st quarter 2022/23 can be downloaded from the CropEnergies website.