Karachi: Sakrand Sugar Mills Limited has reported a notable financial turnaround for the six-month period ending March 31, 2025, as per the un-audited Condensed Interim Financial statements released by the company. The mill's operational and financial performance highlights an increase in sugar production and a return to profitability despite challenging market conditions.
The crushing season for 2024-25 commenced on November 21, 2024, following a directive from the Federal Government, and spanned 105 days. This period saw Sakrand Sugar Mills crush 289,400 metric tons of sugarcane and produce 27,994 metric tons of sugar, compared to the previous year’s 257,489 metric tons crushed and 26,205 metric tons of sugar produced. The shorter operational period of 85 days, down from 98 days last year, indicates efficient processing despite a reduced season duration.
Financially, the company recorded net sales of 3,550.90 million rupees, a substantial increase from 2,592.37 million rupees during the same period last year. The gross profit rose sharply to 244.80 million rupees from 42.31 million rupees. The company achieved a profit before taxation of 161.82 million rupees, reversing a previous loss of 49.72 million rupees, and a profit after taxation of 119.10 million rupees compared to a loss of 82.13 million rupees previously. Earnings per share improved to 2.67 rupees from a loss of 1.84 rupees.
According to information available from the Pakistan Stock Exchange (PSX), Sakrand Sugar Mills successfully exported its allocated government sugar quota, which significantly contributed to its overall revenue. However, the domestic sugar market continued to experience pressure due to rising sugarcane costs, which were not mirrored in sugar prices. The Finance Act 2024-25 exacerbated the situation by introducing a federal excise duty of 15 rupees per kilogram on manufacturer sales and increasing the withholding tax rate for non-filers from 0.2% to 2%, impacting profitability.
The Sindh Government's decision not to announce a minimum support price for sugarcane for the 2024-2025 season signals a shift towards deregulating the sugar industry. Despite historical trends of increasing sugarcane prices, government restrictions on sugar trade continue to exert pressure on local prices, maintaining them below production costs. The Pakistan Sugar Mills Association (PASMA) has called for complete deregulation to allow the industry to operate efficiently in a free market environment.
The Directors of Sakrand Sugar Mills expressed gratitude to government functionaries, banking and financial institutions, suppliers, and shareholders for their ongoing support, which has been instrumental in achieving the company's current financial stability.