AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: The Directors of Dewan Sugar Mills Limited presented the unaudited interim financial information for the period ending on June 30, 2024. The data reveals a sharp decline in net sales and significant operational losses across multiple segments of the business.
According to information available from the Pakistan Stock Exchange (PSX), the sugar mill’s net sales plummeted to Rs. 2,065.97 million from Rs. 5,537.17 million in the corresponding period last year. The gross loss widened to Rs. 299.93 million, up from Rs. 167.00 million, while the net loss after tax was reduced somewhat to Rs. 417.21 million from a previous Rs. 783.09 million.
The operational performance in the sugar segment has been heavily impacted by financial challenges, leading to a temporary halt in plant operations. The company is actively negotiating with financial institutions to reschedule debts and secure further credit lines, which are crucial for resuming efficient operations.
In the distillery segment, alcohol production significantly decreased to 6,438 tons from 18,179 tons year-over-year. The segment reported an operating loss of Rs. 98.86 million, a stark reversal from the operating profit of Rs. 9.17 million in the prior period. This downturn is attributed to a 22% increase in raw material costs and the depressed international market rate for ethanol, which has restricted production to about 35%. The company is implementing various cost-cutting measures and developing a power project to enhance energy efficiency.
The chip board segment also faced downturns, producing only 29,510 sheets compared to 64,610 sheets in the previous period. The operating loss in this segment increased slightly to Rs. 2.58 million from Rs. 1.73 million. Management is focused on improving production by concentrating on value-added and high-quality sheets that are well received in the market.
The company has approached its lender for further restructuring of its liabilities, a process that is currently underway. This restructuring is expected to streamline funding requirements and optimize production capacity, supporting the ongoing use of the going concern assumption in preparing its financial statements.