Lahore: Shakarganj Limited has reported significant financial setbacks in its half-yearly financial statements for the period ending March 31, 2025, highlighting the challenges the company faces in the current economic landscape. The company's performance was severely affected by liquidity issues and a reduction in sugarcane crushing, as detailed in their directors' report.
For the half-year period, Shakarganj Limited's sales revenue decreased sharply to Rs. 5,203.20 million from Rs. 8,017.40 million in the same period last year. The company reported a gross loss of Rs. 1,090.20 million, a slight increase from the Rs. 1,076.60 million loss recorded in the previous year. The loss before levy and income tax widened to Rs. 1,783.40 million, compared to Rs. 1,404.40 million in the corresponding period last year. Despite these challenges, the company managed to reduce its loss after income tax to Rs. 1,655.80 million from Rs. 1,798.10 million in the prior year.
The Sugar Division, which constitutes a significant part of Shakarganj's operations, reported net revenue of Rs. 4,658 million, down from Rs. 7,494 million in the previous period. The division crushed 498,014 MT of sugarcane, a decrease from 778,454 MT last year, resulting in the production of 39,395 MT of sugar at a reduced recovery rate of 7.97 percent. The division's gross loss increased to 19.82 percent from 10.70 percent last year, with a loss before tax of Rs. 1,214.60 million compared to Rs. 1,065.13 million in the previous period.
The company's Biofuel Division showed improvement in production, reaching 3.86 million litres, up from 2.23 million litres last year. However, the division still faced a gross loss of Rs. 84 million, an improvement from the Rs. 203 million loss in the corresponding period last year. The division's loss before tax was reduced to Rs. 157 million from Rs. 238 million last year. The Textile Division remained inactive due to unfavorable economic conditions, as was the case in the previous year.
According to information available from the Pakistan Stock Exchange (PSX), Shakarganj Limited has been placed on the Non-Compliant List due to its current liabilities exceeding current assets by Rs. 6,592.76 million. The company's balance sheet footing stood at Rs. 17,240.72 million, a slight decrease from Rs. 17,507.83 million as of September 30, 2024. Shareholders' equity fell to Rs. 5,116.72 million, down from Rs. 6,752.60 million at the end of the previous fiscal year.
On a consolidated basis, Shakarganj's operating loss before other income, finance costs, and taxation was Rs. 1,760.29 million, compared to Rs. 1,086.56 million last year. The group's consolidated loss after income tax was Rs. 1,946.78 million, up from Rs. 1,729.40 million in the same period last year. The subsidiary, Shakarganj Food Products Limited, reported a loss after tax of Rs. 568.84 million, a significant reversal from a profit after tax of Rs. 118.33 million in the previous year. The group's consolidated balance sheet footing was Rs. 25,584.31 million, down from Rs. 26,059.47 million as of September 30, 2024. Total equity decreased to Rs. 6,429.83 million from Rs. 8,341.54 million.
The management remains optimistic about improving the company's financial position despite the ongoing challenges. Efforts to enhance production efficiency and reduce costs are underway, with the aim of securing adequate financial resources to sustain business operations. However, the short crushing season and high raw material costs have posed significant hurdles. The company is exploring outsourcing options for its distilleries to mitigate the impact of limited biofuel feedstock availability. The management continues to pursue measures to address the liquidity crunch and is hopeful for an eventual turnaround.