AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Al-Abbas Sugar Mills Ltd. presented its unaudited financial results for the nine-month period ending June 30, 2024, revealing a complex financial landscape marked by increased revenues but significantly reduced profitability.
For the period in review, the company achieved a profit before taxation of 1.90 billion Rupees, a decrease from 2.74 billion Rupees reported in the corresponding period of the previous year. Profit after taxation also declined to 1.64 billion Rupees from 2.61 billion Rupees. This decrease in profitability was attributed to higher distribution and finance costs, despite a revenue increase of 2.25 billion Rupees, bringing total revenue to 11.69 billion Rupees.
According to information available from the Pakistan Stock Exchange (PSX), the surge in revenue reflects a successful sales strategy, particularly in the shift from bulk to drum ethanol which, while increasing distribution costs, managed to raise overall sales figures.
The company declared an interim cash dividend of 10 Rupees per share, which adds to an earlier interim dividend of 15 Rupees per share for the nine months ended June 30, 2024. This decision underlines the company’s commitment to shareholder returns despite financial pressures.
In operational terms, the Sugar division saw a notable improvement with gross profit rising to 637.70 million Rupees, up from 294.80 million Rupees, driven by an earlier start to the crushing season and favorable crop conditions which boosted sugar production by nearly 19%. The Ethanol division, however, experienced a decrease in production but an increase in sales, primarily driven by favorable exchange rates and robust export demand.
The report also highlighted challenges such as raw material shortages which affected ethanol production volumes. Despite these operational hurdles, the Ethanol division managed a substantial profit after tax of 1.47 billion Rupees.
Looking ahead, the company outlined significant impacts expected from recent legislative changes under the Finance Act 2024-25, including a shift in tax regimes and new excise duties which could affect future profitability. The sugar mill association has lobbied for more export permissions due to surplus stocks, hoping to alleviate financial pressures and contribute positively to foreign exchange reserves.
In closing, the directors expressed appreciation for the dedication of their workforce and stakeholders, underscoring the strategic measures being adopted to navigate current economic challenges and enhance profitability across all divisions.