Lahore: Shahtaj Sugar Mills Limited has reported a significant reduction in production and profitability for the six-month period ending March 31, 2025, as documented in its un-audited condensed interim financial statements. The company, which operates within the designated market category of sugar manufacturing, saw a 21 percent decrease in sugar production compared to the previous year, primarily due to adverse weather conditions and reduced crop yields.
The production data for the 2025 season reveals that the crushing season commenced on November 21, 2024, ending on February 25, 2025, lasting 97 days—five days longer than the previous year. During this period, the company crushed 591,293 metric tons of sugarcane, down from 679,859 metric tons in 2024. Consequently, sugar production fell to 53,681 metric tons from 67,793 metric tons in the previous year. Despite the overall production decline, molasses recovery saw a slight improvement, with a yield of 27,419 metric tons compared to 28,152 metric tons last year.
The decline in production was attributed to unusual high temperatures and below-normal rainfall, which adversely affected the availability and quality of sugarcane. Furthermore, a lower sucrose content in the cane resulted in a reduced sugar recovery rate of 9.10 percent, down from 9.97 percent. However, the molasses recovery percentage improved to 4.64 percent from 4.14 percent.
The financial performance of Shahtaj Sugar Mills was similarly impacted. The company's turnover for the period was Rs. 4,956.442 million, a slight decline from Rs. 5,072.724 million in the corresponding period of 2023-24. The cost of sales rose to Rs. 4,521.168 million from Rs. 4,284.454 million, leading to a gross profit of Rs. 435.274 million, a notable decrease from Rs. 788.270 million in the previous year.
Despite a decrease in sugarcane procurement costs to Rs. 423 per 40 kg from Rs. 440 per 40 kg, the company's net loss for the period was recorded at Rs. 39.332 million, a significant drop from the Rs. 198.383 million profit in 2023-24. The finance cost decreased to Rs. 177.522 million from Rs. 266.277 million, primarily due to a decline in the policy rate. Loss per share for the period was Rs. 3.27, compared to earnings per share of Rs. 16.52 in the previous year.
According to information available from the Pakistan Stock Exchange (PSX), these financial challenges were compounded by a decrease in quantitative sales of sugar and increased overhead costs, which were exacerbated by the reduced availability of sugarcane.
In terms of strategic projects, the company reported progress on its 32 MW bagasse-based co-generation power project. Key milestones such as obtaining regulatory approvals, executing the Energy Purchase Agreement, and achieving financial close have been successfully completed. The transmission line for the project is fully completed and energized. However, the Commercial Operation Date could not be achieved due to technical issues, which the company is actively working to resolve.