Karachi: Sakrand Sugar Mills Limited has released its financial results for the year ending September 30, 2024, revealing an increase in losses despite a notable rise in sales revenue. The company's financial performance has been adversely impacted by government policy discrepancies, which have placed significant pressure on profitability.

For the fiscal year 2023-2024, Sakrand Sugar Mills Limited reported net sales of 3.34 billion rupees, marking an increase from the 2.63 billion rupees recorded in the previous year. However, the cost of sales remained consistent at 2.53 billion rupees for both years, leading to a gross loss of 64.37 million rupees, compared to a gross profit of 97.13 million rupees in 2022-2023.

The company's loss before taxation increased to 206.43 million rupees from 123.95 million rupees in the prior year, while the loss after taxation rose to 245.99 million rupees from 156.06 million rupees. The loss per share also widened to 5.51 rupees from 3.50 rupees.

According to information available from the Pakistan Stock Exchange (PSX), the extension of the crushing season to 98 days from 74 days in the previous year did not translate into increased crushing volumes, as the company focused on sourcing high-quality sugarcane varieties. Despite these efforts, production costs surged, exacerbated by the Government of Sindh's decision to raise the minimum sugarcane price to 425 rupees per 40 kg, an increase of 123 rupees from the prior season.

The company's management attributes the increased losses primarily to the government's continued policy of maintaining a minimum sugarcane price while allowing sugar prices to fluctuate freely in the market. This policy mismatch has resulted in heightened production costs without corresponding increases in sugar prices, leading to financial strain on the company.

In the designated market category, Sakrand Sugar Mills Limited continues to face challenges in balancing the interests of growers with its financial sustainability. The company's board of directors, led by Chairman Mr. Saleem Zamindar, along with the audit and HR committees, remains focused on navigating these challenges while exploring strategies to enhance operational efficiency and profitability in the coming fiscal year.