Good morning, ladies and gentlemen. Thank you for standing by. I am Francie, your call's call operator. Welcome. Thank you for joining the AGRANA results for the first three quarters of 2022, 2023 conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. Hannes, can you hear me?
Yes.
You can go ahead.
Good morning, ladies and gentlemen. Welcome to our conference call for the first 3 quarters of 2022, 2023. First of all, I would like you to wish a Happy New Year and all the best for 2023. You already got some insights in our figures when we published an ad hoc announcement mid of December. Today, we will provide you with further details on the financials and also on the segments. As announced in our invitation, a presentation is available in reference to our call. You can find this presentation in the IR section of our website. With us today are 3 out of 4 members of the management board.
Markus Mühleisen, as the CEO of the group, will start the presentation with an overview on the highlights of the last 9 months, and he will also comment on the market environment in all three segments. CTO Norbert Harringer will afterwards present to you the group's ESG news, and he will also tell you what is going on in the group regarding raw material, production and investment. Finally, our CFO, Stephan Büttner, will report on the 9 months results in detail, and he will conclude with an outlook. The presentation will take about 30 minutes, and afterwards, the management board will be glad to answer your questions. Now, I may pass over to our CEO, Markus, who will start with the presentation.
Thank you, Hannes, and good morning to everyone. A Happy New Year. Let's get started. As Hannes said, if you turn to slide two, you already have seen some of our numbers in the ad hoc announcement on December 14. You know that we actually had a better than expected Q3, and we're quite pleased with the results year so far. What you really had seen in happening in Q3 was the strength of our diversified portfolio. The fact that the way AGRANA is set up, our business model is a very robust, very sustainable business model and particularly strong in volatile, uncertain times. That's what you particularly saw in Q3.
When we look at our year-to-date performance over the first three quarters overall, it is a strong operating performance and all segments contributed to it. This year we're particularly pleased with the turnaround in our Sugar business after four difficult years. We now see the fruits of many of the measures that we've taken, in particular also over the past year and a half, both on the cost side as well as on the marketing and sales side and in an overall environment, market environment, which is a much more positive and with rising sales prices. You now see the fruits of all this hard work in the results of the Sugar segment.
We have been very focused, as you know, throughout the whole year on managing through the various crises, but also on driving performance. At the same time, we have not neglected our strategic agenda. Sustainability is an important and fundamental part of our strategy going forward. We've worked hard to accelerate our focus on that area. Norbert will comment on that a little bit more later in detail, but we have achieved in Q3 another milestone on our strategic agenda there with the submission of our SBTi targets for verification. As you know, we have an ambitious sustainability agenda. We're actually, I think, one of the leaders in our industry in that area and the amount of work we're putting behind it is quite a lot.
While we're focused on performance, we're also making sure that we don't neglect the strategic agenda going forward. As we think about the next few months and maybe the year overall, for sure, the volatility in the markets will continue. We fully expect it to be another challenging year in terms of raw material volatility, in terms of energy volatility, the geopolitical situation. We're prepared for that. We've managed through that quite well in 2022, and we're confident that we can navigate that well as well in 2023 and that will be or will continue to be our focus. We're obviously now driving towards finishing this business year strongly.
Therefore, we can also confirm our guidance for the full year 2022, 2023. Stephan will comment on that a bit more later in detail. If you turn to the next slide 3, Stephan, later on, will also take you through the numbers of the quarter and year to date in more detail. Maybe just to highlight a few numbers for the quarter. Our revenue was up 27.5% to EUR 950 million in Q3. Our operating profit was up 26.7% to EUR 35.1 million. Our operating margin, despite all the challenges around energy and raw material prices, we were able to hold.
As a result, we actually then delivered an EBIT, as you know, from the ad hoc, of EUR 39.1 million in the quarter, which was about 25% up versus last year and better than we had expected. We had expected the quarter to be more challenging given the slowdown of the economy, given the continued high energy and raw material prices, also the obviously the continued challenges coming from the Ukraine war. Also we had heard from our customers about some challenges in certain sectors, but we managed through that very well. Again, that shows the robustness of our business model. Cumulatively, after three quarters, we now stand at revenues of about EUR 2.7 billion.
That's up 26.4% versus last year. Our operating profit after three quarters is about EUR 122 million, which is up 77% over last year. Also our operating margin is up about 1.2 percentage points. That's a really good increase year-over-year. You understand why we actually feel quite good on where we are and why we are also feeling good about our guidance for the full year. If you now turn to page 4, it's actually a slide I showed to you at the beginning of the year in our Q1, and I just wanna highlight how we've been very focused this year on achieving four things above everything else.
That is, number 1, being very strong on our crisis management. As you know, you know that we have employees, factories and families in the Ukraine and that was top of our mind and managing through that. I can report to you that, as of today, they're still safe despite the many rocket attacks as well in the Vinnytsia area. I can also tell you that we managed to continue our operations in the Ukraine despite the most incredible circumstances. It's just been remarkable how we've been able to maintain operations there and service our customers. I mean, 1 of the things to remember is that even in a war, people have to eat.
We have to play an important role in the Ukraine for our local customers and we're fulfilling that. Also managing through the multiple crises and volatilities in the raw material markets, the energy markets, as you know, we made a decision quite early to invest in the ability to burn heating oil in our factories wherever possible. We'll also comment on that later on. Ensuring therefore not only energy supply but also the ability to service our customers. That has been one of our top priorities for this year is to ensure security of supply. And I can tell you that is very much honored and recognized by our customers. Strong crisis management was our top priority.
Secondly, we had committed to you and our shareholders that we would focus very much on driving performance, and some of the numbers I just showed you, operating performance is evidence of that, how we're improving sequentially quarter after quarter our performance. We've now had seven quarters in a row of strong performance. If you go back and look at it on a quarterly basis, it's just been quarter after quarter of good performance. We will continue to do that. Thirdly, we said, look, we will continue to work on driving change within AGRANA. It's probably a bit less visible from the outside.
Just to remind you know, from the beginning, where we have taken on as executive board, direct operating responsibility for different divisions, to actually also reducing some of the layers within the organization and taking out some positions also at the executive board to facilitate faster decision-making. We've been driving that, but also much more collaboration between business units and departments. We've also made changes in the sales organization. We've made changes to get us closer to our customers, to give more focus on key segments that we want to drive. And I want to call out some of the organizational changes we've made, for example, in our Fruit segment.
We're working on strengthening our leadership competencies across the board. These all part of the organizational cultural change. Fourthly, we also said that we are going through a strategic review, now look, we've made at the beginning of this year a conscious decision to slow that down a bit, because obviously we needed to focus on crisis management and performance. Something that we consciously did. Nonetheless, we're pleased with the progress we've made on our strategic agenda, which as I mentioned, includes also areas such as sustainability.
As we look forward to 2023, we now look forward to accelerating the work on our long-term strategies again. Therefore, I'm pleased to announce if you turn to the next slide 5, that to share those strategies with you and discuss them with you in a bit more detail, we're planning a capital market day in early summer 2023. That's been our sort of timeline all along to present our long-term strategic thinking at that time period. We thought from a format perspective, a capital market day is probably the right format. The date will follow, but we wanted to announce it in today's call. That's an overview.
If you turn to the next 2 slides probably, so slide 6 and slide 7, let me just make a few comments on the market environment in our segments and starting with Fruit. Here, what we're seeing is that some of our branded customers are now experiencing some of that consumer slowdown. Clearly inflation is having an impact there. Some of their consumer offtake is slowing down. We see it growing on the private label side. For AGRANA, this is, we manage that. We're quite well diversified, both geographically as well as from a customer perspective. We're certainly seeing that in the marketplace.
It's something where our customers really asking more our help on both driving innovation in order to then drive growth, but also helping them with cost efficiencies. That's one of the discussions that we're having with our customers in the Fruit segment. On the juice side of the segment, we do see these changing consumer behaviors also positively impacting our concentrate business. We're seeing very good market demand for fruit concentrates. Again, we're well positioned as a company to be successful even in challenging times. On the Starch side, clearly, raw material and energy costs continue to be the key challenges.
In our outlook and the way we see markets develop, we are hoping that this will ease a bit in 2023. While it will continue to be very volatile, we do see some, if you will, some potential relief there over the medium term. We had some very challenging discussions, obviously, with our customers over pricing this year in the Starch segment. We, as you know, our first focus always is to look for internal efficiencies and to see how we can take cost out. Where necessary, we also engage into pricing discussions with our customers.
I can tell you that compared to others in the marketplace, we were probably a bit early and we pushed that a bit harder than others, reflecting our leadership positions in a number of segments. Overall, I think, and you see it a bit also in the results of the Starch segment, that actually we didn't do too badly in achieving some good results there. As I mentioned already before, we're obviously very pleased on the development in the Sugar segment. Now a big contributing factor obviously is that from a overall European market side, the market is much more balanced now in terms of supply and demand that is supporting good prices.
We see that continuing over the next months. That should lead to good prices for the farmers. That's maybe one thing to always remember as well as when we talk AGRANA, then obviously we with the way we also work with our farmers that through our pricing for the sugar beets, farmers will participate in the strong increase on the sales side. As a result, the farmers will see some very good prices for sugar beets over the next year. At the same time, clearly the challenge we have in the Sugar segment is on the energy cost side, energy being a major factor.
What we currently are seeing is that players in the marketplace are being quite rational about recognizing the need to reflect these higher energy costs in production costs and therefore sales prices. That's sort of a few comments sort of for the segments. If you turn to page 8 2022 clearly was a year of many negative headlines. I can report to you because also I was personally there, for example, at a trade fair in Paris, a Food ingredients trade fair there. There's also signs of optimism. You can feel overall optimism returning. We have received a lot of good feedback from our customers on our strength in supplying them on a dependable basis throughout 2022.
Not every producer has been able to do that. We do see a lot of opportunities for us going forward, helping our customers drive innovation, but also drive cost savings. But we have increased our own internal efforts around these areas, and we were able to also present to our customers some terrific new product innovations and new areas to help them grow their business. That's it for me. Now I'd like to turn it over to Norbert. Thank you.
Thank you, Markus. Good morning, ladies and gentlemen. Also from my side, a very warm welcome to our today's conference call and my best wishes for the new year 2023. Let me start with our focus on ESG. To be able to meet the growing environmental challenges and to be able to put more focus on ESG topics, the AGRANA Supervisory Board reorganized the responsibility for sustainability. In the last meeting in November 2022, the final responsibility for sustainability, which was previously shared by the management board, was assigned to me. In the third quarter of the current business year, we submitted our targets for the reduction of greenhouse gas emissions along the value chain to the Science Based Targets initiative, short SBTi, for verification of the targets compliance with the Paris Agreement.
Target ambition and focus measures for reaching those targets are shown on slide 10 of our presentation. In last December, for the first time, AGRANA issued an ESG-linked Schuldscheindarlehen. My colleague Stephan will report on this in detail later on. Let me now come to raw materials and production topics. At AGRANA, the financial third quarter, this means from September to November, is dominated by campaign production. The processing of raw materials in terms of beets for the Sugar segment, potatoes in the Starch segment, and apple in the Fruit segment, has been very satisfactory thus far. In the Fruit segment, the good volume of 2022 apple campaign will lead to continued strong results in the Fruit juice concentrate business in the coming months.
In Fruit prep, the purchasing of fruit from 2022 crop for processing in this financial year and next year was largely completed in the third quarter of 2022-2023. Overall, in the reporting period, about 265,000 tons of raw materials were produced. Raw material supply for the Austrian starch plants and the Bioethanol facility for the current financial year is secured. Raw material prices in the first three quarters of the financial year were higher than budgeted due to the significant increase in global and regional corn and wheat prices. I will refer to this shortly on the next slide. The capacity utilization of the beet sugar factories is a bit lower in this campaign than in the previous year to, due to reduced beet volumes caused by drought.
In the next season as well, beet prices are expected to be at a level attractive to our farmers. On page 13, we can see that quotations for corn and wheat on the Euronext Paris commodity derivative exchange initially rose sharply in the first months of the financial year, following the outbreak of the war in Ukraine. A slight downward trend has been observable since the beginning of September 2022, with prices of EUR 301 per ton for corn and EUR 327 per ton for wheat on the last of November 2022. Still well above the year earlier comparable values of EUR 237 per ton for corn and EUR 280 per ton for wheat.
Ladies and gentlemen, as an industrial food processor, the group has no higher priority this year than ensuring continuity of supply to our customers and the energy and processing security that this requires. The use of extra light heating oil alongside natural gas and the requisite conversion of systems in the relevant Sugar and Starch factories have been effective to date. Employing extra light heating oil to secure production continuity in the short term does not detract from our long-term sustainability measures. Last but not least, some words about our investment activities. Ladies and gentlemen, in the first three quarters of the current business year, AGRANA invested EUR 59.2 million or EUR 9.1 million more than in the year-earlier comparative period.
In the Fruit segment, we did an acquisition of new stainless steel containers for asset replacement and capacity expansion and an installation of new facilities to, for product diversification, the so-called brown flavors in Jacona in Mexico, and the completion of the application laboratory in Dachang in China. In our Starch segment, we continued our measures to increase specialty corn processing in Aschach, and we continued the expansion of the company wastewater treatment plant in Aschach and in Gmünd here in Austria. In the Sugar segment, we did the replacement of three white sugar centrifuges in Tulln here in Austria, and the replacement of the evaporators in Sereď in Slovakia to reduce energy consumption.
Ladies and gentlemen, the total investment across the three business segments in the current financial year at approximately EUR 111 million will significantly exceed the last year's level, but be below this year's budgeted depreciation of about EUR 120 million. Let me now hand over to my colleague, Stephan Büttner .
Thank you, Norbert. Good morning, and also happy New Year from my side. We start with an overview revenue by segment. As already reported today, so overall, we saw a significant increase on revenue of 26.4%, up to EUR 2.7 billion in the first nine months of the business year. When you look at the different segments, we saw a significant increase in revenue in all segments. Fruit, EUR 1.094 billion revenue. Here, Fruit preparations business the revenue amounted to approximately EUR 880 million, a plus of 14% versus the prior year. Juice made around EUR 220 million revenue. This is a plus of 30%.
In Fruit, the increase was mainly driven by price increases. We had a slight reduction in sales volumes of around 5%, mainly driven from the regions in Asia, China, as well as Korea. Of course, you know that we had the difficulties with the COVID pandemic. This was the main driver here, but also we lost, of course, volumes in Russia and in Ukraine. In the Juice business, we saw a significant increase of sales volumes in the apple juice concentrate and also price increases with the berry juice concentrate, and this finally led to this significant increase in revenue of 30%. In Starch, we had an increase of 33.9% in revenue, up to EUR 987.8 million. This is mainly driven by an increase in prices.
We had a 10% reduction in sales volumes in Starch and saccharification products. The sales volume on Ethanol was stable. Here, really mainly, the prices, the higher prices, really driving the increase in revenue. In Sugar, we had an increase of sales volumes of around 3% and also a very significant increase of sales prices of approximately 30%. It is also leading to the significant increase of 33.9% in revenue in Sugar. EBIT by segment on the next page. Here you see, of course, the very negative result in the Fruit segment, but this is mainly driven by the write-off of the goodwill of around EUR 90 million, which we already reported.
On an operating basis, we had a result of around EUR 38 million in the Fruit segment. EUR 24 million coming from the Fruit preparations business, and EUR 14 million coming from the juice business. In juice, this is an improvement of EUR 12 million versus the prior year, and this was, let's say, this compensated the EUR 12 million reduction in the Fruit preparations business. In Starch, a very good EBIT of EUR 67.1 million, compared with the EUR 53.5 million in the prior year. Here in the first half of the year, main driver, of course, was the Ethanol business. In the third quarter, Ethanol prices decreased significantly.
Versus the Q3 in the prior year, we had a significant reduction on profitability in Ethanol, but this was, let's say, compensated by higher Starch prices, especially in Native Wheat Starches. There also the higher Gluten or protein prices heavily supported the contribution margins in the wheat Starch business. In Sugar, I also already mentioned the higher prices, this, of course, was the main driver for the excellent performance versus the prior year, EUR 44.7 million in the first nine months of the business year. As already mentioned today, we're very happy that we could achieve this turnaround in the actual business year. Yeah. Also a slight increase in volumes or in sold volumes, and therefore this good performance.
Overall, as already mentioned, this EUR 50.2 million EBIT on group level, here again, the main driver, of course, is the write-down of goodwill in the Fruit segment. This was mainly driven, as already reported, by the higher weighted average cost of capital. On the next slide, we see the consolidated income statement. This is a summary of the most important numbers again. We already talked about the revenue. EBITDA, EUR 210.8 million, showing really a significant improvement versus the prior year. Also the operating result, more than 75% improvement versus the prior year. Also, the at equity account and joint ventures show a very good result. Exceptional items, I already mentioned, is EUR 89 million.
This is, the main part here is the write-down of the goodwill. Therefore, we are ending with profit before the period of EUR 5.4 million. Energy costs on the next slide. As we also reported last time, that we will see a significant increase of energy costs in the Sugar segment due to the campaign starting usually in September. Now also Sugar caught up, as you can see, and already also here amounting to EUR 102.8 million. Still there, the December is missing, which is also production period. It will further go up. In Starch, the EUR 127.9 million, also versus the EUR 58.1 million, you'll see an increase of 120%. Similar to the increase on a percentage level in Sugar.
Also in the Fruit segment, more than 100% increase, sorry, more than 40% increase in energy costs and on total on group level, more than 100%, up to EUR 264.6 million. This was already mentioned today. These were quite successful to pass this on to the clients. Also let me say that in Starch as well as in Sugar for the remaining business year or for the remaining months of the last quarter of the business year, we are fully hedged with all our energy prices in gas as well as in electricity in both in Starch and in Sugar. There is no further price risk on the energy side for the remaining period of the business year.
The net financial items and the tax rates on the next slide. You see net financial items, minus EUR 18.5 million. Of course, this is much higher than previous year, where we had minus EUR 11.2 million. This is mainly driven by the net interest expense. And the currency translation differences, where we had a negative impact of EUR 8.9 million. This is significantly higher than last year. And the main effect here, of course, is the interest rate gap between the euro and targeted local currencies where we, let's say, have intercompany financing in local currency versus our group financing company. This interest rate gap needs usually should be applied to the interest expense and amounts to around EUR 4 million.
Effectively, our net interest expense is significantly higher than last year. It nearly doubled, and half of it comes from the rise in interest and expenses and the rest of higher gross financial debts during the business year. The tax rate with 83%, of course there it included the write-down of the goodwill. If you adjust the tax rate and you also deduct from the net profit the contribution of our Hungrana Kft. at equity consolidated joint venture, then you have an adjusted tax rate of approximately 24.8%, and this is, I would say, rather quite a normal tax rate.
The consolidated cash flow statement shows very significant improvement, in the operating cash flow before changes in working capital, and amounted to EUR 205.3 million. We see the very significant impact of the changes in working capital by minus EUR 239.9 million. Now we have the peak in inventories. As you know, we have campaign businesses in sugar, but also in the juice business. We have record high, raw material prices and energy costs and, of course, this is all, this is reflected in the changes in working capital. Therefore, we have a net cash used in operating activities of minus EUR 53.2 million. Also, after the first, nine months of the business year, a significant negative free cash flow.
The consolidated balance sheet. We see the total assets of EUR 2.96 billion. In the non-current assets, they went down by 9% to EUR 1 billion 32.6 million. Here again, the main driver is the write-down of the goodwill of around EUR 90 million in the Fruit segment. The current assets, of course, they increased significantly by 27.8% up to EUR 1 billion 928.2 million. Here again, main driver inventories and trade receivables, of course, coming from the increasing raw material costs and energy prices. We see, of course, equity, EUR 1 billion 263.3 million, still very solid.
The equity ratio with a 42.7%, of course, also here a reduction due to the reduced equity after the write-down of the goodwill in the Fruit segment. Net debt, of course, increased significantly up to EUR 692 million, and therefore leading to a period of 54.8%. Main driver again is, of course, the working capital, which increased in all the segments significantly and main driver, raw material and energy prices. When we look at the financing structure, we see borrowings of EUR 783.7 million as of November 30, 2022. Net debt, EUR 692 million. On both sides, you see the significant increase versus the closing date of our business year 2021/2022, February 28th, 2022.
Credit lines, actually EUR 1,067.7 million. Our average effective interest rate was 1.64% during the first nine months of the business year. Already mentioned today, the promissory note loan that we placed a few weeks ago. In Germany, it is Schuldscheindarlehen so we are in very high demand from investors side so therefore we could place EUR 235 million instead of the EUR 100 million we initially planned, you can also see here the conditions so we have volums from the 3 years, 5 years, and 7 years in total that’s EUR 235 million and the total interest rate 4.23 percent with the high interest rate for the 5 and 7 years volumes.
So finally we go on with the Q&A session, just a reminder, we will publish our annual results for 2022, 2023 on the 17th of May. As already stated, we will keep you up to date regarding our capital markets day planned in early summer. Now the lines are open for the questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone.
If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. Our first question is from the line of Bernd Maurer from RBI. Please go ahead.
Hello, gentlemen. Thanks for the presentation. Two questions from my side. First refers to Fruit preparations. You highlighted in the quarterly report a very good environment in Fruit juice, but also said so, especially in Europe, to have a challenging environment in Fruit preparations. You referred to the Ukraine. Can you state a few more arguments behind the current situation and environment in preparations, what led in the end and to year-on-year decline of the Fruit EBITDA? The second question is the obvious one. You had an excellent Q3, a good nine-month result, EBIT after nine months, almost at the upper end of the guidance, and you did not increase the guidance wording with the preliminaries in December, nor you did so today.
Question is clear, is this a very cautionary attitude from your side to have some room for maneuver for final quarter bookings, valuation effects on inventories and so on? Or is really the operating environment deteriorating that significantly that on a clean base, there is hardly any or EUR a few million positive EBITDA to be generated in the fourth quarter? These are my two questions. Thank you very much.
Yeah. Sorry. Yeah, let me try to answer your questions. I think the first question you had concerning the Fruit segment. I already mentioned in Fruit preparations, of course, you know that the last three months of the calendar year can be very difficult in the Fruit preparations business due to our business model, which is still partly, let's say, in place, where we have sales contracts on a calendar year basis, but sourcing is not always on the same, in the same period. If raw material prices, which we also saw, especially also in sugar and fruits and other ingredients, then further go up, then we lose contribution margin. This happened again, of course, this year.
Also energy prices here play a very important role. Also, of course, in Ukraine, as you mentioned, the profitability went down significantly versus prior year. These are all the effects which are really, let's say, having a negative impact on the profitability in Europe in the Fruit preparations business especially. Also already mentioned today that we have difficulties, especially in Asia, and here most, I would say in China, where we really miss a significant amount of profitability, and this is mainly driven by the market environment there caused by the coronavirus pandemic this zero COVID policy and all the lockdowns. We have a quite similar picture in Korea. I would say these are the main challenges.
In juice, we already mentioned we had a very good campaign, as well in the Berry juice concentrate as also in the Apple juice concentrate. There we were also able to fix good sales prices. We had a good utilization rate of our factories. We also do not really see a negative impact here on consumption. We had a very difficult environment during Corona. Now we have a better market condition here, and it's not so price sensitive. Also, raw material prices, especially for Apple, did not go up significantly, so it's quite stable. Therefore also we expect good results in the coming months. I hope this answers your question about the Fruit segment and the guidance, of course. Yes.
I mean, you say we are very cautious here. I can tell you that we had a very challenging December. You know, December, first month of the fourth quarter. Here we already see somehow an impact of the reduced consumption, especially in Sugar, but also in the other segments we see a slowdown of our sales volumes. We so really need to observe what happens in the remaining two months of the fourth quarter. Of course, I mean, you can also see especially in Starch the Ethanol prices where we had a massive reduction already lower than EUR 700 per cubic meter. On one hand. Sorry. One second.
Sorry. We will be back soon.
So sorry. We had kind of an emergency announcement for, what is it, practicing or reason. Here in the Raiffeisen -Haus. Now we are back. Yes, cautious. I already mentioned again now the Ethanol prices we saw a significant decrease. We don't know how this will develop further. Energy prices, of course, they went down significantly. We also don't know how this will further develop. Of course, this is also very well volatile. Things can change very quickly. In electricity, we are still in the spot market, which was the right decision that we took in the last weeks or months. But it can go up quickly when the temperature goes down. Nobody knows, sales volumes, as I already mentioned.
We have still a lot of challenges ahead of us, and therefore we are, yes, of course, a little bit cautious, but let's see how things will further develop. Thank you.
Thank you.
The next question is from the line of Baptiste Ludwig from Kepler Cheuvreux. Please go ahead.
Hello, everyone. Thank you for the presentation. I have a series of questions on the Sugar segment, more specifically. First question is on the contracted price. I think the negotiation with your customers for the Sugar marketing year 2022, 2023 took place at the end of last year. I would like to know if you managed to obtain significantly higher prices than the year before, and I assume that is it is the case. What is the magnitude of the, I would say, of the price increase, average increase in the contracted price in Sugar?
What we see that most analyst houses that expect that the market price continue to rise sharply in the coming weeks and months. What's your view based on the state of supply and demand and the, and the sharp increase in production costs, what's your view on this? In connection with this increase in prices, how do you expect the volume to develop as a result of higher sugar selling prices?
The last question also, should we expect some profitability to be under pressure in the future, given the lower utilization of the plants, because I understand that the beet processing campaign was quite weak, lower utilization of plants? What can you say about this? Thank you.
Yeah. Let me quickly answer this. On one end, I mean, we will not talk now about specific prices, I would say, but what I already mentioned is that the reported prices in the first nine months of the business year 2022, 2023 versus the first nine months of the prior year showed an increase of around 30%, yeah. What we can tell you also right now is that, of course, we contracted all the production volumes that we had out of the campaign 2022. There we, of course, will see a further increase in sales prices in the price reporting in the coming months, yeah.
I would say I really expect a further increase versus the actual reported price, reported price level of around 40%-50% in average. Please also consider that this means also significantly higher raw material prices, especially for the sugar beets and also the higher energy costs need to be reflected, and we already reported on that. Yes, we expect stable good profitability in the Sugar business for the coming months. Major impact, but also will have the sales volumes. I also mentioned that we had a challenge in December, so let's see how this further develops. We cannot really say what happens now in January, February, and so on.
We saw an impact, a negative impact, a significant negative impact in December, but you know, it's not clear to us if it's a temporary effect or is it a shift from December to January. We will monitor this closely, but of course, sales volumes will also have an impact. Utilization rate that you mentioned, I mean, we had low production volume in the actual campaign. You know now, and this is mainly due to the higher sales prices, we expect a significant increase of acreage and of beets planted in the coming season, starting in April, May. Therefore, we expect a higher utilization rate for the next campaign in 2023.
When we look at the utilization rate in the campaign 22, I mean, this is already reflected in the sales prices, in the margins that we expect till 2023, the new campaign.
Very clear. Thank you very much.
Thanks.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by one on your telephone. The next question is from the line of Vladimira Urbankova from Erste Bank. Please go ahead.
Yes. Hello, good morning. I apologize. I had some difficulties in connection. Maybe this was already answered, yeah, I'm just wondering if you could give us any hint what to expect in the fourth quarter as far as the operating result in comparison to the previous year. Also, you mentioned that you are fully hedged. What is the outlook for the energy costs in the fourth quarter of fiscal year 2022-2023? Last but not least, I noticed that for the Starch segment, you slightly improved your guidance for the EBIT. What is the major reason for this improvement compared to the previous expected moderate reduction? Now you expect flat. What is supporting the performance? Thank you.
Thank you, Mrs. Urbankova. Let me maybe start with the Starch question, it's easier. I mean, of course in our forecast, we have an expectation for energy prices and so on. As we already reported today, we saw a significant decrease here. We are on the spot market somehow in electricity especially. You know, we expected prices at that time of more than EUR 300-350 per megawatt hour. You know that we are down to EUR 160 currently. We already saw a reduction here, and therefore, we slightly, let's say, improved our guidance in Starch. Again, let us see how things develop, especially in the Ethanol market and also in the energy markets. You know, it's very difficult.
Markus already mentioned that we have enormous volatility everywhere. This is not so easy. When we talk about Q4, I mean, I think I already answered this question. You know, on group level, I mean, we still confirm that we will have a very significant improvement on EBIT level versus the prior year, despite this write down of additionally EUR 90 million in goodwill in the Fruit segment. The guidance, I mean, Q4 in 2021, 2022, our total EBIT was also, let's say, mainly driven by we had in the Q4 the impairment of more than EUR 17 billion also in Fruit. This is also difficult to compare.
Of course, I mean, currently we do not expect or it's difficult to say if we need to expect a further write down of goodwill in the Fruit segment. We need to monitor how the interest rate will develop and so on. Without that, of course, we expect a significant increase of our profitability in Q4. When we compare with Q3, we expect lower results in the actual business year. I already mentioned that December is always a very difficult month, and we also see a massive decrease in Ethanol prices, and these are the main drivers.
The energy costs, any expectations? As you said, you are fully hedged. How much to factor in?
Energy costs, we are more or less fully hedged, but still we have a certain open position on electricity, but will not have the a major impact, yeah. Again, it really depends on the sales prices which are not fixed, yes, and they're mainly ethanol.
Yes. Thank you.
There are no further questions at this time. I hand back to Hannes Haider for closing comments.
Yeah, thanks. As there are no further questions, thanks for your participation in the call. Of course, you can also contact me afterwards for further questions. Have a nice remaining day and goodbye.