Lahore: The Thal Industries Corporation Limited announced its financial results for the quarter ended 30 June 2024, presenting unaudited accounts in compliance with Section 237 of the Companies Act, 2017. During this period, the company processed over 2.7 million metric tons of sugarcane but experienced a decline in sugar recovery rates, primarily due to the lower quality of sugarcane and adverse climatic conditions. According to information available from the Pakistan Stock Exchange (PSX), the company also reported a decrease in net sales and pretax profit compared to the same period last year.
Despite higher yields reported by growers during the current crushing season, which started on 25 November 2023, the company's sugar recoveries were negatively impacted. This season's notified support prices for sugarcane were set at Rs. 400 per 40 kg in Punjab and KPK, and Rs. 425 per 40 kg in Sindh, with the actual purchase prices consistently higher. Thal Industries processed 2,701,533.490 metric tons of sugarcane, a slight increase from the previous year's 2,575,765.773 metric tons. However, sugar production declined to 260,695.850 metric tons from 277,663.950 metric tons last year, with recovery rates dropping to 9.655% from 10.784%.
The financial performance of the company reflected these operational challenges. Net sales for the nine-month period totaled Rs. 20,901.469 million, a slight decrease from Rs. 21,465.601 million in the prior year. Pretax profit was significantly lower at Rs. 1,014.961 million, down from Rs. 2,211.746 million, attributed to lower sugar prices and increased interest costs.
In response to these challenges, Thal Industries has focused on enhancing process efficiencies and adopting modern technologies. Efforts are underway to improve sugarcane quality through better seed varieties and agricultural inputs, aiming to boost sugar recovery rates and benefit the growers.
The company adheres to strict corporate governance practices as outlined in the Listed Companies (Code of Corporate Governance) Regulations, 2019, and the Rule Book of Pakistan Stock Exchange. The Board of Directors, consisting of ten members including three women, oversees various committees dedicated to audit, risk management, human resources, and remuneration.
Looking forward, the company faces a challenging macroeconomic environment with high policy rates and inflationary pressures likely to increase operational costs. The government's approval of sugar exports could provide some relief by generating cash flow and earning foreign exchange, although further permissions are needed.
The Board extends its gratitude to the company’s employees, financial institutions, farmers, and stakeholders for their continued support and cooperation, which is crucial for navigating the challenging landscape ahead.