VICTORIAS Milling Company Inc. (VMC) has reported a 6% growth in its attributable income for fiscal year 2019, driven by high sugar prices and the early start of operations of its distillery plant.
In a regulatory filing, VMC said net income attributable to the parent reached P817.494 million for the year ending August 2019, versus P765.713 million recorded in the same period a year ago. The company’s fiscal year starts in September.
This is despite a 15% decline in revenues to P5.579 billion, year-on-year. Broken down, sale of goods fell 18% to P5.012 billion, while service income increased 16% to P567.606 million.
The company produces raw sugar, refined sugar, molasses, alcohol, ethanol, and exports power. It also provides tolling services to raw sugar producers.
Revenues from refined sugar stood at P2.416 billion, followed by raw sugar at P1.683 billion; ethanol at P549.257 million; and molasses at P208.398 million. Power generation contributed P24.036 million, followed by alcohol at P17.657 million.
“This was mainly due to higher sugar price levels compared last year and the early start of commercial operations of the distillery plant which generated 27% of the group’s gross profit,” VMC said in its disclosure on Monday.
The distillery plant, which produces ethanol and alcohol, has a daily capacity of 50,000 liters.
The higher prices of sugar were also able to offset the rising cost of cane hauling during the period, which led to a 20% increase in gross profit to P1.423 billion. Operating costs jumped 38% to P850.111 million, driven by “higher provisions, professional fees and contracted services cost, representation expenses and taxes paid.”
For crop year 2018-2019, cane milled by the company declined 10% to 2.7 million tons, year-on-year, due to a fall in provincial output by 6% to 11.88 million tons.
The decline in output is attributed to El Nino, which limited the moisture content required in sugarcane farming. Despite this, cane juice quality improved, which led to the increase to 1.89 50-kilogram bag (LKG) per ton cane milled from 1.85 LKG per ton cane milled.
VMC was incorporated in 1919, with a core business to engage in integrated raw and refined sugar manufacturing. It has facilities in Victorias City, Negros Occidental.
Its subsidiaries include Victorias Foods, Corp., Victorias Agricultural Land Corporation; Canetown Development Corporation; Victorias Green Energy Corp. and Victorias Golf and Country Club, Inc.
Shares in VMC increased 0.39% to close at P2.57 each at the stock exchange on Monday. — Vincent Mariel P. Galang