Karachi: JDW Sugar Mills Limited has reported a significant decline in its net profit for the nine months ending June 30, 2025, with a profit after tax of Rs. 3.08 billion compared to Rs. 8.37 billion in the same period last year. This decrease has led to a reduction in earnings per share from Rs. 145 to Rs. 53, and a drop in the gross profit ratio from 20% to 12%. The company attributed its profitability to its sugar and co-generation divisions, while experiencing losses in its Sugarcane Corporate Farms.
The company's directors outlined several factors contributing to the downturn. A slight decrease in gross turnover was compounded by a crash in sugar prices in the first half of the financial year, forcing sales below cost to meet working capital needs. Molasses prices also fell significantly. Administrative expenses rose due to inflation and annual increments, while other income decreased substantially, mitigated in part by profits from surplus fund placements.
According to information available from the Pakistan Stock Exchange (PSX), JDW Sugar Mills Limited is classified under the sugar industry category. Financial charges decreased due to a continuous decline in policy rates by the State Bank of Pakistan (SBP). In a move towards deregulation, provincial governments did not set support prices for sugarcane for the 2024-25 crushing season, leaving pricing to market forces. The Pakistan Sugar Mills Association has lobbied for full deregulation to stabilize prices and enable international competition.
The company's balance sheet has grown to Rs. 94 billion, with accumulated reserves substantially exceeding paid-up capital. JDW Sugar Mills maintains prompt financial obligations and favorable relationships with financial institutions. The company prioritizes payments to sugarcane growers, a practice initiated in 2017-18 and well-received by growers. Recent initiatives include loans for solar tubewells to reduce irrigation costs, enhancing the financial viability of sugarcane crops.
On May 16, 2025, VIS Credit Rating Company Limited reaffirmed JDW's credit ratings at 'AA-/A-1' with a stable outlook, highlighting the company's good credit quality and liquidity. The financial year 2024-25 is anticipated to be favorable due to reduced finance costs and stable sugar prices, although changes in export tax regimes may impact profitability. Despite financial commitments, JDW announced a first interim cash dividend of Rs. 20 per share.
JDW Ethanol commenced trial runs on July 12, 2025, with expectations to start commercial production by August 1, 2025. The plant, with a capacity of 230,000 liters per day, is expected to operate at full capacity. Construction of a new office building in Lahore is proceeding on schedule, with completion anticipated by 2027. Continued performance improvement and financial cost reduction remain priorities for JDW Sugar Mills Limited. The SBP's recent base rate reduction augments these efforts, further decreasing financial charges.