Roxas Holdings delays milling to improve profitability
Roxas Holdings Inc., an integrated sugar and ethanol producer, said it has delayed the start of its milling operations to improve its profitability.
The company trimmed its losses to P112 million in the first quarter of its fiscal year 2016/2017 from P125 million the year before as it improved its operating efficiency and lowered its costs.
In a disclosure to the stock exchange, Roxas Holdings said its revenues were halved in to P1.49 billion in the three-month period from P2.7 billion the year. The company said it opted to preserve its share of raw sugar for milling for later refining to achieve higher profitability. Its sales contracts for refined sugar booked the current quarter already increased by 27 percent to P1.7 billion from P1.3 billion a year ago.
Roxas Holdings said it delayed the start of its current milling operations this year to optimize the advantages of milling more mature canes, with its Central Azucarera de la Carlota Inc. starting its operations in October and Central Azucarera Don Pedro Inc. starting milling in December 2016.
“Notwithstanding the later start of the milling season and the unseasonally wet weather conditions which hampered sugar cane harvesting operations, the Group managed to slightly improve sugar production to 1.554 million Lkg bags (50-kg bags) from 1.545 million Lkg bags for the same period last year, driven by operating efficiencies and improvements in relationships with planter partners,” Roxas Holdings said in a statement.
Roxas Holdings chairman Pedro E. Roxas said: “The Group’s revenues are expected to accelerate in the coming quarters as CADPI started its refining operations in January and deliveries to customers of refined sugar under these sales contracts starts. We are also beginning to see positive effects across the Group from the upgrading efforts we undertook at our sugar and ethanol plants last year.”
Roxas Holdings president and CEO Huber Tubio said the company’s gross profit rate improved to seven percent in the current crop year from four percent a year ago which he attributed to the organization realignment undertaken and the upgrading of equipment and process that reduced its expenses.