ROXAS Holdings, Inc. (RHI) swung to a net loss in its fiscal year ended Sept. 30, due to lower sugar production and higher costs.

In a statement, RHI said its attributable net loss stood at P1.884 billion for 2019, from a net income of P47.66 million a year ago, due to “higher feedstock costs, lower sugar production volume, and increases in interest costs.”

Revenues grew 33% to P6.554 billion, with sale of goods growing 20% to P5.833 billion, and sale of services surged to P721.161 million from P48.498 million. This was driven by higher prices and sales of alcohol, as well as increase in revenue from milling activities, which reached P1.5 billion.

However, cost of sales and services ballooned 57% to P6.431 billion.

“We faced a very tough market during the past year. Philippine sugar output for Crop Year 2018-2019 was down 17.12% year-on–year at 2.072 million metric tons due to unfavorable weather conditions,” RHI Chairman Pedro E. Roxas said in a statement.

“Talks on the liberalization of the sugar industry were also rampant during the period, causing a softening of sugar prices… Our results reflect the impact of these challenges,” he added.

The Department of Finance (DoF) proposed the liberalization of sugar imports in September in a bid to help food processors to be more competitive in the global market. However, senators opposed such a move, saying this will lead to the loss of livelihood of sugar farmers and workers.

Higher interest rates weighed on the company’s efforts to reduce its debts, which declined 8% to P9.8 billion. The company also utilized net earnings from sale of some assets in November to reduce long-term debt to P900 million.

“We will continue to look for opportunities to significantly reduce our debt levels,” RHI Executive Vice President and Chief Finance Officer Celso T. Dimarucut said.

Meanwhile, RHI’s ethanol business improved in 2019 due to system and equipment upgrades.

“Our ethanol units registered the highest production volumes in the past three years, better than the target for 2019,” RHI President and Chief Executive Officer (CEO) Hubert D. Tubio said.

Roxol Bionenergy Corp. (RBC) reported the highest methane fuel displacement at 60.67% in May 2019 as anaerobic digesters improved in production of biogas.

Mr. Tubio expressed hope the next fiscal year will be better for the company as senators unanimously voted against the liberalization of sugar importation, “which should help stabilize the market.”

“RHI is a resilient company that continues to seek ways to refine its competitive advantage despite the many ongoing industry challenges. We are actively engaging our stakeholders as we work closely with government in crafting solutions to issues hounding the industry,” he added.

Aside from RBC, RHI, which is described as the largest integrated sugar business in the country, manages sugar miller Central Azucarera de la Carlota, Inc.; ethanol producer San Carlos Bioenergy; and RHI Agri-business Development Corp.

Shares in RHI fell 1.52% or 0.03 centavos to close at P1.95 apiece in the stock exchange on Thursday. — Vincent Mariel P. Galang