(Adds comments from Copersucar CEO)
By Marcelo Teixeira
SAO PAULO, June 21 (Reuters) - Brazilian sugar firm Copersucar reported on Wednesday a profit of 254 million reais ($76 million) for the crop year 2016/17, versus 32 million reais a year earlier, due to higher sugar prices and larger sales from subsidiary Eco-Energy and the joint venture Alvean.
Copersucar, a cooperative formed by more than 20 sugar and ethanol companies in Brazil, ended the 2016/17 cane crop year with total revenues of 28.3 billion reais, 7.6 percent more than in the previous season.
“We had a small fall on cane crushing volume, but better prices for sugar and ethanol on average in the crop, which boosted margins,” said the company in the earnings report.
Associated Copersucar mills in Brazil crushed 87 million tonnes of cane in the crop ended in March, 2.5 percent less than in the previous season. Copersucar sold 5.3 million tonnes of sugar, 3.6 percent less than in 2015/16, and 4.2 billion liters of ethanol, 16 percent less.
But the company said larger selling volumes in its wholly-owned subsidiary Eco-Energy Biofuels in the United States and in the 50-50 joint venture with Cargill, the world’s largest sugar trader Alvean, helped its results.
It said Alvean traded 12.1 million tonnes of sugar in the period, 5.2 percent more than in the previous crop year, giving the joint venture a 26 percent share of the global raw sugar trade.
Copersucar Chief Executive Officer Paulo Roberto Souza told reporters during a conference call that Alvean reported better margins last year, taking advantage of a volatile market for raw sugar.
“Alvean benefited from cash and carry. They used our warehouses for that strategy,” said Souza, saying higher volatility usually improves margins for traders such as Alvean.
He said the joint venture boosted sugar sourcing in Brazil by doing business with independent mills. Souza believes it could well grow another 4 or 5 percentage points in volumes in the new crop.
Copersucar said its ethanol subsidiary Eco-Energy increased sales in the U.S. by 4.5 percent in 2016/17, to 9.2 billion liters.
“They gained share in a consolidated market, so they gained market from competitors”, Souza said. Copersucar estimates its subsidiary holds now a 16-percent share of the American market.
Souza said Eco-Energy is in talks with ethanol producers in the U.S. to have access to new supplies of the biofuel, as a way to further expand in that market.
$1 = 3.32 reais Reporting by Marcelo Teixeira; Editing by Bernard Orr and Chizu Nomiyama