Victorias Milling sees lower earnings

VICTORIAS CITY, NEGROS OCCIDENTAL — Victorias Milling Company ( VMC) Inc. expects profit falling by an annual 12% this year, as sugar prices continue to remain low.

VMC Chief Finance Officer Teresita V. Ilagan said the sugar miller’s net income may go down to P700 million from the P798 million it posted in 2016. The listed company’s fiscal year ends in August.

“The original outlook was about P1 billion but we will go somewhere (around) P700 million this year,” she said in a press briefing here on Monday. VMC posted a net income of P1 billion in 2015.

For its first quarter ending November, VMC earned P119.08 million, 59% lower than the P292.19 million in the comparable period in 2015 due to late start-up this crop year.

Ms. Ilagan attributed the low sugar prices mainly to the massive importation of high fructose corn syrup (HFCS), an alternative sweetener used by some industrial manufacturers for beverages, cookies and juices.

The Sugar Regulatory Administration ( SRA) earlier said that from January to November last year, local industry players imported around 285,000 metric tons (MT) of HFCS, 44.67% higher than the 197,000 MT of HFCS shipped to the country in the same period in the prior year.

As of Jan. 8, mill site sugar prices have gone down to P1,538.03 per 50-kilo bag from P1,784.92 at the start of the September milling season, according to the SRA price watch.

VMC President and Chief Operating Officer Eduardo V. Concepcion said sugar production for this year may be flat as it continues to feel the effects of the severe El Niño last year.

“Overall picture now is total production will be more or less the same last year. Tonnage is high but sweetness is not as high in the previous year,” he told reporters at the same briefing.

Mr. Concepcion added that the company’s initial target was to achieve milling 3.2 million tons of cane for the current year. This was revised downward to a “more realistic” 3 to 3.1 million level.

“Malaki talaga impact ng El Niño kasi na- stunt yung growth ng mga canes eh (El Niño’s impact was really big because it stunted the growth of the sugarcanes),” Linley A. Retirado, VMC chief manufacturing officer, said in an interview.

However, Mr. Retirado noted the firm’s milling target for the current year is still considerably on the high side. VMC recorded its highest tonnage of 3.3 million tons of cane in only two financial years from 2003, he added.