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Ethanol Europe

Crop Energie reap rewards of soaring European ethanol prices

Crop Energies boosted their expected revenue for the 2016/17 financial year once again, with strong European ethanol prices and high capacity utilisation across all four ethanol plants predicted to continue driving profits higher. According to a press release from the firm, strong spot physical ethanol prices, which continue to climb higher than previous forward prices would have suggested have boosted Crop Energies’ revenue forecast, climbing 4% from previous expectations to between 800 and 810 million euro.

According to PRIMA data, European T2 FOB ARA physical ethanol prices have soared 6.4% MoM, reaching their highest level since November 2015 last week. Meanwhile the market has remained in strong backwardation further down the curve.

Revenue expectations for the coming 2017/18 financial year will be heavily dependent on movement in the spot physical price of ethanol according to the firm. Taking into account both the backwardation currently being seen in the market, and European grain prices, CropEnergie still expect operating prodits for the 2017/18 year to reach 80-120mn euro, around the same level as expected operating profits for 2016/17 of 95-100mn euro. This has led to expectations that Crop Energie could then be “completely debt-free for the first time in company history”.

Crop Energies run four ethanol plants in Germany, Belgium, France and the UK, producing 1.3mn m3 of ethanol for fuel use per year.

NB 13/2/2017

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