Sindh Abadgars Sugar Mills Limited Reports Significant Losses in Third Quarter

Karachi: Sindh Abadgars Sugar Mills Limited has reported a significant downturn in its financial performance for the nine months ending June 30, 2024, according to its latest un-audited financial statements. The company recorded a loss after taxation of Rs. 142.79 million, compared to a profit of Rs. 33.04 million in the same period last year.

During the nine months under review, Sindh Abadgars Sugar Mills experienced a sharp decline in sales, which dropped by 20% to Rs. 2,249 million from Rs. 2,819 million in the corresponding period last year. This decrease in revenue was primarily due to a 43% reduction in sales volume from 35,812 metric tons to 20,365 metric tons. Despite a rise in the selling price of sugar, it was not sufficient to offset the significant increase in the cost of sugarcane production. Financial costs also surged by 55% to Rs. 468 million, further impacting the company’s profitability.

According to information available from the Pakistan Stock Exchange (PSX), the challenging financial scenario was exacerbated by the high costs associated with sugarcane procurement. The industry average cost of sugar production reached Rs. 155 per kg, while the ex-mill price stood at only Rs. 135 per kg due to an oversupply in the market.

Looking ahead, the company has highlighted the government’s recent permission to export 150,000 metric tons of sugar, which may alleviate some financial pressure by improving cash flow. However, the Pakistan Sugar Mills Association (PSMA) has urged for an immediate increase in export allowances to at least 1.00 million metric tons, as international prices are currently favorable but expected to decline.

The company’s financial position as of June 30, 2024, shows total liabilities and equity amounting to Rs. 8,981.80 million, with current liabilities significantly higher than the previous year, totaling Rs. 5,704.29 million.

The board has expressed gratitude towards shareholders, growers, banks, customers, and staff for their continued support during these challenging times. As the next sugarcane crushing season approaches, the industry’s focus remains on government actions regarding sugar export policies to prevent further financial distress.