Listed sugar miller Victorias Milling Co. Inc. had a so-so year. While net income generally increased, revenues and productivity declined.
The company’s net income increased by a total of seven percent, reaching P816 million for the 2019 crop year.
As reported by Phil Star, the increase may mainly be because of the high sugar prices.
According to the company, sugar price levels are higher in 2019 compared to the previous year.
Another factor that contributed to the net income increase is the early start of commercial operations of the distillery plant. This accounted for 27% of the group’s gross profit for the year.
Net Income Increased; Revenues Dropped
Revenues, however, are a different story altogether.
The miller saw its revenues declining by 16 percent, plummeting to P5.58 billion.
This does not faze the company.
Even with the drop in revenue, gross profit still improved by 25%. The higher prices of sugar had sufficiently covered the high costs of cane hauling in 2019.
The company’s production data also revealed that it was only able to mill 2.7 million metric tons of cane.
This is substantially lower from the number posted in 2018, which was 3 million MT.
El Niño Affected Productivity of Victorias Milling Co
VMC explained that the El Nino episode that reduced soil moisture necessary for sugarcane crop to grow optimally is the leading cause for this drop.
This natural phenomenon also caused cane productivity to dry up a little and reduced tonnage per hectare output.
The sugar milling business in total experienced a 44 percent decline in revenues.
Regardless of the high prices or the early start of refinery operations, the drop is not insignificant.
Revenues now stand at only P2.42 billion, because of the lower sugar net production.
The company’s alcohol sales also decreased by a whopping 93 percent. The figure is now down toP17.7 million.
In addition, power generation revenues also dropped by a significant 31 percent.
It is now only at P24 million.
The company only expanded to distillery products and other dehydrator projects in January 2018.
On a positive note, its sales of molasses increased to P208.4. This is a mean feat, considering the previous number was just P21 million.
VMC is an integrated raw and refined sugar manufacturing company located in Negros Occidental.
It has several operating subsidiaries under it, one of which is the Victoria’s Food Corp.
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