Karachi: The Premier Sugar Mills and Distillery Company Limited, a key player in the sugar industry, released its consolidated financial statements for the fiscal year ending on September 30, 2024. These statements, audited by independent auditors, reflect both growth and challenges within the group, particularly concerning its subsidiary, The Frontier Sugar Mills and Distillery Limited (FSM).
According to the audit report, the consolidated financial statements of Premier Sugar Mills and its subsidiaries provide a true and fair view of the group’s financial position as of September 30, 2024. The report, based on International Standards on Auditing, highlights a material uncertainty regarding the going concern status of FSM. Since 2008, FSM has been non-operational due to unfavorable economic conditions, including the diversion of sugarcane to Gur production. As of the report’s date, FSM’s accumulated losses reached Rs.139.115 million, raising concerns about its sustainability.
The financial statement reveals that Premier Sugar Mills experienced a mixed performance last year. Total assets increased from Rs.37.45 billion in 2023 to Rs.39.58 billion in 2024. Notably, non-current assets grew due to significant investments in property, plant, and equipment, valued at Rs.29.65 billion, up from Rs.26.80 billion the previous year.
Current assets, however, saw a decline, with stock-in-trade reducing from Rs.5.51 billion to Rs.4.99 billion, and trade debts decreasing significantly from Rs.1.25 billion to Rs.440.45 million. This drop in current assets, from Rs.10.09 billion to Rs.9.17 billion, indicates challenges in liquidity and operational cash flow.
Equity attributable to equity holders of the holding company decreased from Rs.17.80 billion in 2023 to Rs.15.28 billion in 2024. This reduction was influenced by a loss after taxation, contributing to a decline in unappropriated profits from Rs.9.20 billion to Rs.7.25 billion.
According to information available from the Pakistan Stock Exchange (PSX), Premier Sugar Mills remains a significant entity within the “Food and Personal Care Products” market category. Despite its challenges, the company continues to show resilience through strategic investments and asset management. However, the ongoing losses at FSM and the reduction in equity signal potential areas of concern for stakeholders.
The auditors noted the transfer from the revaluation surplus on property, plant, and equipment on account of incremental depreciation, net of deferred taxation, which was Rs.733.997 million. This adjustment reflects the company’s efforts to maintain asset value and manage depreciation effectively.
As Premier Sugar Mills navigates financial challenges, the market will closely monitor its strategies to address the subsidiary’s losses and improve overall financial health. The company’s ability to adapt and innovate will be crucial in sustaining its market position and ensuring long-term profitability.