VICTORIAS Milling Company, Inc. (VMC) grew its attributable profit by 74% in its first quarter ending November 2018, driven by higher sugar prices even as volumes of sugar sold declined.
In a regulatory filing, VMC said net income attributable to the parent reached P81.53 million from September to November 2018, versus P46.75 million posted in the same period a year ago. The company’s fiscal year starts in September.
“This was mainly due to the increase in gross profit from high sugar prices during the quarter and the focus on selling products which have higher profit margin as compared to last year,” the company said.
Prices of sugar went up by a fifth or 20%, helping VMC offset the decline in volumes sold, which otherwise led to a 30% drop in revenues to P1.3 billion.
“The decline in revenue… was only due to change in the product mix as less refined sugar volume were sold but tolling volume tripled compared to the same period last year,” it said.
The lower revenues can also be attributed to the 66% decrease in alcohol revenues for the period.
Meanwhile, VMC benefited from the start of its ethanol operations, accounting for six percent of total revenues during the quarter.
VMC milled 0.9 million tons of cane for the first quarter of crop year 2018 to 2019, flat from the same period a year ago. About 30% of the canes came from district areas, while the rest were evenly taken from North, South, and Central Negros.
Raw sugar recovery dipped to 1.81 50-kilogram bag (LKG) per ton came milled, from 1.82 LKG in the same period last year. Total raw sugar production accordingly slumped by 5% to 1.6 million LKG.
Molasses production was steady at 39,000 metric tons, while refined sugar production fell to 1.2 million LKG.
The company noted that it secured a short-term loan worth P450 million during the quarter to finance its working capital requirements. It expects to repay the loan within the next quarter. Long-term debt meanwhile went down to P1.125 billion by end-November, after VMC paid quarterly amortization amounting to P375 million.
Incorporated in 1919, VMC’s core business is to engage in integrated raw and refined sugar manufacturing, with sugar plant facilities located in Victorias City, Negros Occidental. The company has also diversified to ethanol and potable alcohol production.
Its operating subsidiaries include Victorias Foods Corporation; Victorias Agricultural Land Corporation; Canetown Development Corporation; Victorias Green Energy Corp. and Victorias Golf and Country Club, Inc.
VMC’s market capitalization stood at P6.39 billion, based on its share price of P2.33 each last Jan. 2. — Arra B. Francia