SUGAR refiner Roxas Holdings Inc. (RHI) swung to a net loss of P124.83 million in its first fiscal quarter ending December 31, 2015 from a net profit of P8.8 million a year earlier due to insufficient cane supply and defective sugar plants.
In a disclosure to the Philippine Stock Exchange Friday, the sugar group said that the poor performance in the quarter was mainly caused by the combined impact of insufficient cane supply, delay in the start-up of its Batangas plant, and temporary shutdown for needed operational improvements of its newly acquired plant.
The company said that historically, its fiscal first quarter performance, which begins in September and ends in December, is low as manufacturing cost is typically high during said period.
On the other hand, consolidated revenues increased 29 percent to P2.7 billion in the first quarter from P1.17 billion a year earlier on higher revenues from raw and refined sugar and alcohol.
Refined sugar contributed P544.77 million, or more than eight times the previous year’s sales of P62.87 million, while raw sugar sales jumped by 58 percent to P1.22 billion from the year-earlier record of P774.98 million.
Sales of its alcohol products more than doubled to P911.24 million in the first quarter from the P338.75 million recorded in the same quarter the previous year, driven by additional sales amounting to P339 million in 2015 from newly acquired company San Carlos Bioenergy Inc.
Hubert Tubio, the sugar firm’s president and chief executive officer, said the combined gross profit of Central Azucarera de la Carlota Inc. and Roxol Bioenergy Corp., located both in La Carlota City in Negros Oriental, was insufficient to carry the group’s total expenses for the period.
Operating expenses climbed to P240.53 million, or about 76 percent higher than the previous year’s comparative P135.93 million.
“We hope to see an improvement in our full-year core net income,” Tubio said in a statement.
The RHI Group has, however, assured its shareholders that it is now addressing its operational difficulties as it started rolling out improvements in all its plants, and has allocated a capital expenditure amounting to P1.4 billion for the current fiscal year, which started last October and will end in September 2016.
Also, the firm announced that during its meeting on Wednesday, its board of directors approved a rights offering of common shares, to be offered to the common shareholders of RHI.
“Determination of the final terms and conditions of the stock rights offer will be announced once these are finalized,” the company said.