FSC Suffers $23.1M Loss
The Fiji Sugar Corporation suffered a trading loss of $23.1 million for the year ending May 31, 2019.
This was compared to a profit of $844,000 for the 2018 financial year. Loss before income tax was $80.07m compared to $24.62m last year.
This included cane payment to farmers throughout the year. FSC received an income of $132.8m compared to $182.1m for 2018. Expenses incurred by the Corporation was $155.89m compared to $181.26m for 2018.
FSC received $98.38m from sugar and molasses sales through export compared to $147.67m for 2018 while domestic sales amounted to $34.39m compared to $34.43 for 2018.
The company’s total assets stood at $203.9 m with $159m being noncurrent assets and $44.36m as current assets.
Total equity deficit stood at $321.8m as at May 31, 2019 with the total equity and liabilities standing at $203.9m.
Meanwhile an impairment review of the assets of the Corporation for the year ending 31 May 2019 was carried out by an independent consultant from New Zealand. Accumulated impairment losses provided in earlier years totalled $78.4m and a further impairment of $5 million was provided in 2018 in respect of the 50 tonne boiler at Labasa Mill.
During the year, FSC borrowed US$15m (FJ$32m) from Czarnikow Group Limited by way of trade finance to meet operational expenditure and growers cane payments. The loan would be repaid through the second and third shipments of sugar for the 2019 crushing season. FSC also secured a $50m loan from the Fiji National Provident Fund to meet its working capital and capital expenditure requirements, against which the drawdown was $25m. A further Bridging Finance Facility of $21.21m was secured from FNPF in May this year to fund the fourth cane payment including the top up by FSC of the guaranteed price of $85 per tonne.
The security provided was through confirmed property sales and a Government guarantee with repayment term of six months. FSC also secured a $20m loan from Bred Bank to assist with upgrading works at the Lautoka, Rarawai and Labasa mills.
The loan is a four-year term with Government guarantee with $5m payable each year.
As at May 31, 2019, the loan was fully drawn down and the $5m paid.
Good news for the Sugar Cane Growers Fund (SCGF) sugarcane farmers.
The Fiji National Provident Fund (FNPF) has now recognised the SCGF as an approved lender. This means that more than 11,317 sugar cane farmers who are members of the Sugar Cane Growers Fund, will now be able to access loans through the SCGF and use their FNPF housing eligibility for several housing related purposes. This ensures that current FNPF members consider investing in a sugar cane farm as an additional source of income. This will be subject to the existing FNPF housing withdrawal assistance guidelines. SCGF Board director and chairman of the Board Credit Committee, Tevita Madigibuli said this opens up opportunities for FNPF members who are also members of the SCGF to:
* purchase a cane farm;
* purchase a cane farm with an existing house
* reduce or clear existing housing loans.
“We at SCGF are thankful to FNPF for allowing us to be an approved lender. Our strategic intent is to provide a wide range of services to the growers and those who need funding in the sugar industry,” Mr Madigibuli said.
FNPF chief executive officer Jaoji Koroi said the Fund is always supportive of initiatives that would ensure the social protection of its members.
“We understand that sugar cane farmers have faced a lot of challenges through the years and we are supportive of efforts that not only ensures that their families have a livelihood to sustain them but that also enables them to provide their families with a proper home. “We are always encouraging our members to plan their retirement well and consider other opportunities such as investment or income generating initiatives that will help ensure a financially stable life after retirement,” said Mr Koroi. “This partnership with SCGF offers an opportunity to make a difference in the sugar industry.”
Back to farm
Mr Madigibuli said that the SCGF would be launching the “Back to Farm” campaign which offers interest rebates to farmers for clearing their loans in part or full by the end of December 2019.
“So the FNPF funds can help in this programme too, given that we are now an approved lender,” said Mr Madigibuli.
SCGF chief executive officer Raj Sharma, labelled this as a huge achievement for the SCGF as well as the sugar industry.
“We can expect new farmers in the sugar industry as a result of SCGF becoming an approved lender and we anticipate interest from working class people to consider cane farming as a supplementary income,” said Mr Raj. He adds that SCGF staff have undergone the relevant training in terms of FNPF’s processes. Interested FNPF members are encouraged to visit their nearest SCGF office with a copy of their latest FNPF statement for assessment or for queries on cane farm land that are available.