Lahore: Baba Farid Sugar Mills Limited has released its un-audited financial results for the quarter ending June 30, 2025, showing a notable turnaround in profitability. The sugar industry, a crucial part of Pakistan's agricultural economy, remains the second-largest agro-based sector after textiles. Recent challenges have included adverse weather conditions and rising input costs, which have reduced sugarcane yields. However, modern cultivation techniques have mitigated some impacts, and the company's strategic initiatives have supported its performance.
During the 2024-25 crushing season, the Provincial Governments allowed market forces to dictate sugarcane pricing, with the company procuring sugarcane at an average rate of PKR 422.55 per 40kg. This deregulation represents an initial step towards a market-driven industry.
Operating highlights for Baba Farid Sugar Mills Limited reveal that the company processed 569,620.090 metric tons of sugarcane, producing 54,991.500 metric tons of refined sugar. This marks an 8.67% increase in sugarcane crushed compared to the previous year. Despite a decline in the recovery rate, net sales for the nine months reached PKR 7,847.777 million, a significant rise from PKR 3,258.131 million in the previous year.
The company reported a profit before tax of PKR 600.284 million, a significant improvement from a pre-tax loss of PKR 400.859 million in the previous year. According to information available from the Pakistan Stock Exchange (PSX), this turnaround is attributed to increased sales volume and higher average selling prices, alongside a reduction in benchmark interest rates from 22% to 11%, which lowered financial charges.
To sustain growth, Baba Farid Sugar Mills Limited is focusing on strategic support for cane growers, including providing high-quality seed varieties, timely access to fertilizers, and comprehensive agronomic guidance. This support aims to enhance sugar recovery and farm productivity.
The future outlook for the sugar industry remains cautiously optimistic. While sugarcane procurement has transitioned to market-based pricing, the government continues to regulate ex-mill and retail prices. The Pakistan Sugar Mills Association advocates for complete deregulation to enhance sustainability and competitiveness. A reduction in the State Bank of Pakistan's policy rate is anticipated to support financial performance across the sector.
Tax policy changes, including the shift from the Final Tax Regime to the Normal Tax Regime for export earnings, may moderately impact profitability. The industry's focus remains on operational efficiency and value creation, with the next crushing season expected to start in early November 2025. Export decisions will depend on stock levels and domestic availability.
The Board of Baba Farid Sugar Mills Limited acknowledges the dedication of its workforce and the support of all stakeholders, including financial institutions, growers, and government agencies, in achieving the company's goals.