Mirpurkhas Sugar Mills Limited Reports Loss Despite Increased Sugar Production

Mirpurkhas: Mirpurkhas Sugar Mills Limited disclosed un-audited financial results for the nine months ending June 30, 2024, revealing significant operational and financial challenges. Despite an increase in sugar production, the company reported a substantial pre-tax loss, reflecting the tough market conditions and rising costs.

The sugar division of the company saw an improved production output, with the plant crushing 616,103 metric tons of sugarcane, yielding 66,100 metric tons of sugar, up from 562,641 metric tons of sugarcane and 59,325 metric tons of sugar in the same period last year. This increase in production aligns with an overall rise in sugar production across Sindh and nationally. The plant’s efficiency was notable with an increased sucrose recovery rate of 10.73%. According to information available from the Pakistan Stock Exchange (PSX), the government’s decision to raise the minimum support price of sugarcane by approximately 41% significantly inflated the cost of cane for the company, affecting overall profitability.

In contrast, the company’s paper division struggled with low capacity utilization of about 34%, managing to produce 23,239 tons and selling 22,427 tons of paper amidst escalating costs and decreasing consumer spending due to challenging economic conditions.

Financially, Mirpurkhas Sugar Mills faced a downturn with a pre-tax loss of Rs. 1,189.57 million, a stark contrast to a profit of Rs. 870.959 million in the previous year. Net sales increased to Rs. 9,016.35 million from Rs. 4,868.84 million, but this was offset by high costs of sales and increased financial expenses, which surged by 83% due to higher interest rates and increased raw material prices. Additionally, the company recorded a significant share of loss in its associate Unicol Limited, impacting its financial standing further.

Looking ahead, the company’s future in the sugar sector hinges on the export of sugar and domestic price improvements. The government has approved the export of 150,000 tons of sugar, with Sindh receiving a 30% quota. Timely government actions and efficient transportation of sugar stocks are crucial for the industry to fulfill financial obligations and contribute to the national economy. Despite tough times, the company is focusing on financial strategies to mitigate the impacts of high interest rates and economic instability.

Acknowledging the efforts of its stakeholders, the company expressed gratitude towards its customers, shareholders, staff, and financial partners for their ongoing support during these challenging times.