Karachi: Sanghar Sugar Mills Limited has reported a significant improvement in its financial performance for the six-month period ending March 31, 2025. According to the company's unaudited condensed interim financial statements, which were reviewed by statutory auditors, the company achieved a profit of Rs. 44.15 million, compared to a loss of Rs. 224.88 million in the corresponding period last year.
The operating results of Sanghar Sugar Mills indicate a decrease in sugarcane crushing from 515,994.30 metric tons in the previous season to 464,266.43 metric tons in the current period. Sugar production also saw a decline from 52,293.50 metric tons to 46,023 metric tons, with a recovery rate drop from 10.135% to 9.920%. The company attributed these declines to lower crop yields and reduced cane quality.
In terms of financial outcomes, Sanghar Sugar Mills reported a profit before levies and taxation of Rs. 75.06 million, a significant improvement from a loss of Rs. 185.49 million in the previous period. Levies amounted to Rs. 43.08 million, resulting in a profit before taxation of Rs. 31.98 million, compared to a loss of Rs. 222.95 million. Taxation for the period was Rs. 12.17 million, contributing to the net profit of Rs. 44.15 million. Earnings per share increased to Rs. 3.70 from a loss of Rs. 18.82 per share in the previous period.
According to information available from the Pakistan Stock Exchange (PSX), the company's local sugar sales decreased by 2.77%, while the weighted average cost of production rose by 7.15%. Despite these challenges, the export sales of sugar provided a financial cushion, aiding in improved cash flows and savings in Sales Tax and Federal Excise Duty (FED). The sale of molasses remained stable in quantity but experienced a 17.12% reduction in selling rate, whereas the selling rate of bagasse increased by 22.75%.
The deregulation policy for the sugar industry during the 2024-25 crushing season led to the Provincial Governments not setting minimum support prices for sugarcane, leaving pricing to market dynamics. The company procured sugarcane at prevailing market rates, offering competitive prices to growers.
An emphasis of matter was noted by the auditors regarding a non-provision of Rs. 22 per maund for the 2017-18 season, amounting to Rs. 391.67 million. The management anticipates that this issue will be resolved in the Honourable Supreme Court of Pakistan, following a consent order from the Sindh High Court.
Looking forward, the company remains hopeful that the ongoing increase in sugar prices will lead to improved results. The directors expressed gratitude towards the company's workforce, government entities, financial institutions, suppliers, and shareholders for their continued support and cooperation.