Sugar and bio-energy producer Roxas Holdings Inc. said core net income dropped 74 percent to P169 million in the fiscal year ending September from P645 million year-on-year on lack of cane supply coupled with declining sugar prices and rising costs.
Roxas Holdings chairman Pedro Roxas said in a statement Thursday it experienced double whammy as it tried to plug the concerns in its plants while trying to combat the combined impact of declining sugar prices and escalating production costs prevalent in the global market.
“Our core income took a hit as our factories reeled from difficulties that prompted our sugarcane planters to go to other mills. This worsened the shortage of cane supply. We also had to spend roughly P700 million for new equipment and repairs to address the problems at the plant,” Roxas said.
The company said it tried to arrest the decline in the company’s core net income by adding the factory concerns and the plant repairs required.
Roxas Holdings said overall Philippine cane supply fell 5 percent in the past fiscal year, with the rate in Batangas at 10 percent compared with Negros Occidental’s 5 percent
The group’s ethanol businesses cushioned the impact, with Roxol Bioenergy Corp. and San Carlos Bioenergy Corp Inc. registering a net income after tax of P215 million and P122 million, respectively.
Roxas Holdings in May acquired SCBI, which recently completed an expansion project that increased the plant’s capacity to 38 million liters per year from 32 million liters.
To abate the impact of unpredictable sugar prices and the concomitant challenge of declining cane supply, alongside the factory problems and the ongoing repairs, the company said it would tighten measures to prop up the sugar business and maintain its focus on ethanol.
The sugar group said it was also confident of gaining lost ground in the current fiscal year with the new leadership installed in the company, following the appointment of Hubert Tubio as president and chief executive and Celso Dimarucut, as chief finance officer, Tubio was formerly the chairman of the Bioeq Energy Holdings Inc. and previously served as president and chief operating officer of Victorias Milling Co. Inc. from 2009 to 2014.
He set record production volumes in both raw and refinery operations since the Victorias’ founding in 1919 and recorded the highest yield and sugar recovery in the Philippines, while capturing 25.7 percent of the cane supply in Negros Occidental in 2012 to 2013.
Tubio also steered the company to record gains in 2013 despite the softening of sugar prices.