VICTORIAS MILLING Company (VMC) saw its net income rise by 17% to P764 million for the fiscal year ending Aug. 31, as lower production and operating costs offset the decline in prices of sugar and alcohol.
In a regulatory filing, VMC reported gross revenues dropped 24% to P6.6 billion during crop year 2017-2018. The company reported an 11% decline in provincial output, but increased its Negros market share to 23.5% versus 22% in the previous year.
VMC milled 3 million tons of cane, 8% lower than the 3.2 million tons milled last year.
“The significant decrease in the topline was mainly attributed to the decline in volume sold as a result of lower production in 2018 as well as the decline in average prices of sugar and alcohol as compared to the previous year,” the listed company said.
Raw sugar recovery fell to 1.85 50-kilogram bag (LKG) per ton cane milled in 2018, from 1.87 LKG per ton cane milled in 2017, because of the low quality of canes.
Raw sugar output slipped by 9% to 5.5 million LKG, while refined sugar net production rose 13% to 4.6 million LKG. At the same time, alcohol production dropped to 5.8 million liters as compared to 8.6 million liters in 2017 “due to prolonged shutdown from repair and improvements.”
“However, despite the decline in revenue, gross profit increased from 15% to 18% in 2018, which was mainly due to the decrease in costs of cane hauling and lower production costs,” VMC said.
VMC said operating expenses fell by 22% to P615 million, due to decline in repairs and maintenance, labor costs, consultancy fees and taxes caused by the management’s push for cost optimization. — R.J.N.Ignacio
