Premier Sugar Mills Reports Significant Profit Increase Amid Challenging Economic Conditions

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Mardan: The Premier Sugar Mills experienced a significant rise in profits during the nine-month period ending June 30, 2024. The company recorded a profit after taxation of Rs. 134.966 million, a substantial increase from Rs. 13.576 million in the corresponding period last year.

According to information available from the Pakistan Stock Exchange (PSX), the directors presented the un-audited condensed interim financial information to shareholders, adhering to International Accounting Standard No. 34 ‘Interim Financial Reporting’, the Code of Corporate Governance under Section 237 of the Companies Act, 2017, and the Listed Companies (Code of Corporate Governance) Regulations, 2019.

The sugarcane crushing season for 2023-24 began on October 25, 2023. The mills crushed 130,269 tons of sugarcane and produced 12,477 tons of sugar by December 15, 2023. However, operations ceased prematurely due to the diversion of sugarcane toward tax-free Gur manufacturing, rendering continued operations financially unsustainable at higher prices.

The financial year 2023-24 posed increased challenges, exacerbated by the government’s indecision regarding the surplus sugar stock of 1.5 million tons. Additional economic pressures included a rise in the discount rate by the State Bank of Pakistan, hyperinflation, and escalating sugarcane procurement prices. These factors significantly increased the production cost of sugar, which did not see a corresponding rise in market prices, leading many mills to sell sugar below production costs, thus precipitating a financial crisis.

In response to these challenges, the sugar association advocated for the export of excess sugar, a decision delayed by the government for political considerations.

In developments aimed at diversification and innovation, the company is upgrading its Distillery Plant, with completion targeted for December 2024. Additionally, the Board has approved the establishment of a jaggery plant with a capacity of 750 Tons Crushing Per Day at the mills premises in Mardan, set to commence operations in the upcoming crushing season.

The accounting policies employed in this quarterly condensed interim financial report are consistent with those used in the preceding annual financial statements.

The Directors expressed their appreciation for the dedicated efforts of the company’s staff at all levels.