Karachi: The Board of Directors of Mirpurkhas Sugar Mills Limited has disclosed the company's unaudited financial results for the half-year ending on March 31, 2025, reflecting a decrease in sugar production due to operational challenges and policy shifts.
The sugar division of the company commenced its 2024/25 crushing season on November 21, 2024, operating for 97 days, similar to the previous year. However, the company faced lower sugarcane yields and depressed sugar prices. The Sindh Government's decision not to notify a minimum support price for sugarcane, in line with the International Monetary Fund's requirements, added to these challenges. The company crushed 508,214 metric tons of sugarcane, producing 52,977 metric tons of sugar, a decline from the previous year's 616,103 metric tons crushed and 66,100 metric tons of sugar produced. The sucrose recovery rate also decreased to 10.42% from 10.73%, attributed to the delayed onset of summer and water shortages in Sindh.
During the period, Mirpurkhas Sugar Mills sold 24,442 metric tons of sugar, including 5,003 metric tons of exports, compared to 37,949 metric tons sold in the corresponding period last year. Total sugar produced in Sindh decreased to 1.618 million metric tons from 2.022 million metric tons. National sugar production stood at 5.74 million tons, down from 6.77 million tons in the previous season. The company operated retail outlets for subsidized sugar during Ramzan, though the government continues to influence retail prices. According to information available from the Pakistan Stock Exchange (PSX), the Federal Board of Revenue (FBR) has introduced a mechanism for fixing the value of sugar for sales tax calculation, potentially increasing tax collection from the industry.
In contrast, the paper division experienced a 51% increase in production, manufacturing 21,828 metric tons of paper compared to 14,431 metric tons last year. Sales volumes grew to 22,563 metric tons from 13,879 metric tons. Despite efficient operations, the division faced challenges such as subdued demand and rising costs due to increased prices for old corrugated cartons and other inputs.
Financially, the company reported a pre-tax loss of Rs. 172.531 million for the half-year ending March 31, 2025, compared to a Rs. 555.663 million loss in the same period last year. Net sales decreased to Rs. 5,630.39 million from Rs. 6,068.01 million, while gross profit increased to Rs. 773.36 million from Rs. 594.72 million. Other income rose to Rs. 35.26 million, primarily from dividend income. The company also accounted for a Rs. 15.61 million profit from its share in Unicol Limited.
The company remains focused on overcoming economic challenges, including high raw material prices and government influence on sugar prices. The International Monetary Fund recently revised Pakistan's GDP growth rate projection to 2.6% for fiscal year 2025, down from an earlier 3% forecast. Mirpurkhas Sugar Mills aims to minimize negative impacts and maximize shareholder value through strategic financial management and operational adjustments.