Karachi: Faran Sugar Mills Limited has reported a substantial change in its financial performance for the nine months ending June 30, 2025, as detailed in the Chief Executive's review. The company disclosed a significant net loss of Rs.1.10 billion, compared to a net loss of Rs.131.87 million in the previous year. This decline is reflected in the loss per share, which showed a very large or significant move to Rs.40.39 from Rs.3.72.
The company's gross turnover witnessed a very large or significant move to Rs.9.13 billion from Rs.9.42 billion in June 2024. Despite a big move in gross profits, which increased to Rs.647.81 million from Rs.495.60 million, the financial costs also saw a very large or significant move, rising to Rs.1.07 billion from Rs.603.12 million. The share of profit from associates exhibited a very large or significant move, shifting to a loss of Rs.353.67 million from a profit of Rs.119.42 million.
Operationally, the sugar production season commenced earlier this year on November 10, 2023, and concluded on February 24, 2024, spanning 107 days. The company crushed 867,332 metric tons of sugarcane and produced 90,727 metric tons of sugar, indicating improved recovery rates at 10.461%.
According to information available from the Pakistan Stock Exchange (PSX), the company's pre-tax profit for the third quarter of the year reached Rs.339 million, suggesting a positive turnaround since the half-yearly results. This improvement is attributed to increased sales volumes and higher sugar prices, alongside a reduction in finance costs.
The market conditions post-crushing season have seen a significant rise in the selling price of refined sugar. This is attributed to lower production levels and increased production costs. The strategic delay in selling new season sugar has benefitted the company, leading to better margin recovery.
Moreover, Unicol Limited, a significant associate, reported a strong gross profit of Rs.2.60 billion, despite geopolitical and market challenges. The earnings per share for Unicol Limited stood at Rs.2.39, highlighting a marked improvement.
The broader sugar industry anticipates positive developments as talks of deregulation continue, with hopes for a permanent policy that could bolster economic contributions through import substitution and increased export activity. However, the government's decision to import 50,000 tons of sugar to stabilize domestic prices, coupled with the lack of international tender offers, could impact market dynamics.
The sugar sector's future looks promising, though industry stakeholders remain cautious of potential disruptions from administrative interventions.