SUGAR miller Roxas Holdings Inc. (RHI) saw its net profit grew nearly five times in cropyear 2016 ending September, from a year earlier, on the back of higher prices and sales volume.
The company said it also realized gains from an investment in the alcohol business.|
In October 2015 to September 2016, RHI posted a consolidated net income of P102 million up 451.35 percent from P18.5 million in the same comparable period.
This would have been higher if not for the impact of interest and depreciation charges from investments in the alcohol business and in improving the efficiency of the sugar business, the company said.
Consolidated revenue was up 47 percent at P12.1 billion from P8.2 billion, helped by improvements in the sugar and alcohol businesses as well as the uptick prices of raw and refined sugar to a five-year high.
Revenue from sugar increased at P7.8 billion from P5.6 billion, with combined tonnage of cane milled (TCM) at the Negros and Batangas mills rose by 5 percent at 2.7 million tons.
But the expenses incurred in sugar cane sourcing grew at P1.3 billion from P1.0 billion, significantly reducing the gross income margin of the sugar business at 8.1 percent from 11.3 percent.
Revenue from the alcohol business went up at P4.2 billion from P2.6 billion, reflecting the benefits of efficiency improvements at the San Carlos Bioenergy Inc. in the first quarter of the crop-year since it was acquired in May 2015.
Chances are that the renewed relationship with planters and equipment upgrades would be beneficial to prospects in crop-year 2017, said RHI President and CEO Hubert D. Tubio.
“The completion of the off-season repairs will enhance the efficiency and profitability of all our plants in the incoming crop year 2016 to 2017,” he said.
The group is earmarking P1.5 billion in capital expenditure for the next crop-year, up from P900 million. The 2016-2017 capex will be funded by a combination of equity and borrowings.
Celso T. Dimarucut, RHI chief financial officer and executive vice president, noted the group has been investing significantly in expanding its alcohol business and improving the operational efficiency of its sugar business since 2015.
The miller targets P1.7 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) in the new crop-year and to focus on debt reduction.” Its 2015-2016 EBITDA hit P1.3 billion, up 34 percent from P1 billion a year earlier.
“We hope to have an improved positive story in the coming year as we begin to benefit from the major investments in plant and equipment made in recent years at our sugar and ethanol plants,” Tubio said.
RHI Chairman Pedro E. Roxas said the group is confident that its decision to invest in and expand its alcohol business will bring stable and consistent returns to RHI, going forward, being the country’s biggest ethanol producer with the combined capacity of 285,000 liters per day from both SCBI and Roxol Bioenergy.
Incorporated in 1927, RHI is the third-biggest sugar mill and refinery in the country.