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Karachi, Sakrand Sugar Mills Limited has announced its financial results for the six months ending March 31, 2024. According to the directors’ report, the company witnessed a challenging half-year, marked by increased operational days but stagnant production rates and rising costs, primarily due to heightened sugarcane prices and inflationary pressures.
The operational performance revealed that the crushing season for 2023-24 lasted 98 days, compared to 74 days in the previous season, with the sugarcane crushed totaling 257,489 metric tons. Despite the extended season, production levels remained similar to the previous year, highlighting the management’s focus on procuring high-quality sugarcane to avoid production losses. According to information available from the Pakistan Stock Exchange (PSX), the financial outcomes reflected these operational challenges.
Financially, Sakrand Sugar Mills reported a net sales of Rs. 2,592.37 million, up from Rs. 2,032.14 million in the prior period. However, the company recorded a loss before taxation of Rs. 49.72 million and a further loss after taxation of Rs. 82.13 million, an improvement from last year’s Rs. 98.67 million loss. The loss per share also decreased slightly from Rs. 2.21 to Rs. 1.84.
The Sindh Government’s decision to raise the minimum support price of sugarcane from PKR 302 per maund to PKR 425 per maund, a 41% increase, significantly impacted the cost structures of sugar production. This, coupled with rising input costs amid high inflation, prevented the company from adjusting the selling prices of sugar, which remained lower than the increased production costs.
Furthermore, the company’s financial stability is under scrutiny, as current liabilities exceed its assets by Rs. 2,187 million. Despite these challenges, the management remains optimistic, focusing on initiatives like processed fertilizer production and improved production cycles to enhance future profitability.
The company, incorporated in 1989 and listed on the Pakistan Stock Exchange, operates its main sugar mill in District Shaheed Benazirabad, Sindh. Its ongoing operations and financial strategies are closely monitored, given the significant role of sugar production in the regional economy.