Lahore: The Thal Industries Corporation Ltd. has reported a significant improvement in its profit before tax for the quarter ended June 30, 2025, despite facing challenges in the sugarcane sector. The company's financial performance was detailed in an un-audited report presented by its directors, in compliance with section 237 of the Companies Act, 2017.
Sugarcane remains integral to Pakistan's agricultural economy, being the second-largest agro-based sector after textiles. It contributes significantly to the country's agricultural value and GDP. However, the 2024-25 crushing season was marked by adverse weather conditions and rising input costs, leading to an estimated 10-15% decline in sugarcane yield per acre.
In a move towards deregulation, provincial governments did not set official support prices for sugarcane this season, allowing market forces to determine pricing. The company procured sugarcane at an average rate of PKR 429 per maund.
The company processed approximately 2.50 million metric tons of sugarcane, producing 241,471 metric tons of white refined sugar, with a recovery rate consistent with last year's 9.655%. However, the volume of sugarcane crushed declined by about 7.4% due to reduced availability in the current season.
Net sales for the nine months of the financial year reached PKR 37,395.77 million, showing a very large or significant move compared to PKR 20,901.47 million in the previous year. Consequently, the company's profit before tax increased to PKR 1,734.11 million, demonstrating a big move from PKR 1,014.96 million in the same period last year. This improvement was driven by higher sales volume and an increased average selling price. Additionally, the reduction in benchmark interest rates from 22% to 11% positively impacted the company's profitability by lowering financial charges.
According to information available from the Pakistan Stock Exchange (PSX), the sugar industry operates in a semi-regulated environment. While sugarcane procurement has shifted to market-based pricing, the government attempts to regulate ex-mill and retail sugar prices to manage domestic market costs. The Pakistan Sugar Mills Association continues to advocate for complete deregulation to enhance sectoral sustainability and competitiveness.
On the macroeconomic front, the State Bank of Pakistan's reduction in the policy rate is expected to lower borrowing costs, benefiting the sector's financial performance. Tax policy changes, particularly the shift from Final Tax Regime to Normal Tax Regime for export earnings, may moderately impact net profitability. The IMF's opposition to tax exemptions, including on imported sugar, could also limit future policy relief.
Despite these regulatory and fiscal challenges, the industry remains committed to improving operational efficiency and sustaining value creation. The next crushing season is anticipated to commence in early November 2025, with export decisions based on carryover stock levels and domestic availability.
The Board of Thal Industries Corporation Ltd. expressed its gratitude to its workforce, financial institutions, growers, government agencies, and other stakeholders for their continued support and cooperation.