We maintain our Market Perform following the Q4/20 beat. Volume growth was solid in both segments, driven by COVID-19-related demand, as well as improved export and industrial sugar volumes. Sugar EBITDA was a beat, Maple Products was in line. Both segments enter F2021E with a supportive demand backdrop; combined with margin mix and lower operating costs, this should lead to improved EBITDA. While the outlook is generally positive, we believe sustained earnings improvements are needed for multiple expansion, following 2-3 years of declines.

Rogers Sugar reported Q4/20 (ending Sept.) adj. EBITDA of $31.2mm, above our estimate of $24.6mm and consensus of $26.1mm. Adjusted EPS of $0.14 was above our estimate and consensus of $0.10.

Sugar adj. EBITDA of $28.0mm (up 42% y/y) was above our $22.6mm estimate. Above forecast sugar volumes and positive margin mix more than offset higher-than-expected admin and selling expenses (~$1mm COVID-19 costs). Adj. GM/MT of $157.51 (+27% y/y) was above our forecast of $134.95.

Sugar volumes increased 14.5% y/y to 225k MT (a quarterly record), above our estimate of 210k; +14k impact from extra week. Volumes increased across all segments, reflecting ongoing COVID-19 retail strength, normalized industrial demand (vs. earlier COVID-19 disruptions) and expected U.S. TRQ export volumes.

Positive F2021E Sugar segment outlook. Volumes are expected to be up 5,000 MT (in line with our forecast), with flat liquid volumes and higher industrial (+4,000 MT) and export (+10,000 MT) volumes, partially offset by lower consumer volumes (-8,000 MT). The positive volume outlook, combined with lower operating and supply chain costs vs. F2020, are expected to lead to F2021E EBITDA growth.

Maple Products adjusted EBITDA in line. Volumes increased 30% driven by higher COVID-19-related demand; revenues were in line (+20% y/y). Lower-than-expected adj. gross margin (7.9% vs. 8.5% forecast, down 180 bps y/y) was offset by lower-than-expected admin & selling and distribution expenses, which led to adj. EBITDA of $3.2mm (+27% y/y) being in line. 2021E Maple Products outlook positive, driven by steady demand growth, gross margin expansion and realizing gains on manufacturing optimization and efficiency improvements.

2021 estimates increased. $6 target based on 9.6x 2022E EV/EBITDA.