Karachi: On behalf of the Board of Directors and myself, I am pleased to present before you the unaudited financial statements of the Company for the nine-month ended June 30, 2024. The sugar industry, an essential sector in Pakistan, is facing a mix of regulatory and economic challenges, despite government interventions to support sugarcane pricing and encourage cultivation. The sector has seen a 33 percent increase in the minimum support price of sugarcane and significant tax hikes on sugar sales, impacting both production and profitability.
This fiscal year, Jauharabad Sugar Mills Limited began its crushing season on November 25, 2023, mirroring the start date and duration of the previous year. The company achieved a marginal increase in production, crushing 657,997 metric tons of sugarcane, slightly up from 651,476 metric tons in the prior year. Despite the short crushing period and a 6.8 percent reduction in stoppages, the operational hurdles have not deterred the company’s commitment to timely financial dealings with growers and vendors.
According to information available from the Pakistan Stock Exchange (PSX), Jauharabad Sugar Mills reported a top-line revenue of Rs. 4.90 billion for the nine months, a slight increase from Rs. 4.87 billion in the same period last year. Gross profits surged by 25.48 percent to Rs. 994 million from Rs. 792 million, reflecting efficient operations and possibly better pricing mechanisms. However, the earnings per share also saw a rise by 33 percent. Despite these gains, profit before tax suffered a slight decrease to 1.89 percent of sales, primarily due to a significant 56.45 percent rise in financial costs, attributed to higher interest rates and other economic factors.
The company remains hopeful that sugar market prices will rally in the final quarter of this fiscal year, potentially offsetting the financial strain caused by the new taxes under the Finance Act of 2024. The sugar industry in Pakistan currently holds a three-month surplus in sugar stock, which presents an opportunity for valuable foreign exchange through exports, although bureaucratic delays remain a significant obstacle.
The directors extend their gratitude to all stakeholders for their continued support, which is crucial for navigating the ongoing economic pressures and regulatory changes. The company maintains a robust relationship with financial institutions and is up-to-date with all financial obligations.