Roxas Holdings trims loss in 1st quarter

ROXAS HOLDINGS, Inc. (RHI) trimmed its losses in the first quarter of its crop year, on the back of increased efficiency and reduced costs.

In a statement on Wednesday, the listed sugar and ethanol producer said that, based on its unaudited financial results, its consolidated net loss in the first quarter of crop year 2016- 2017 reached P112.3 million, 10% lower than the P124.8- million net loss it recorded during the same period a year ago.

“Despite lower revenues recognized during the current period, the Group reduced its first quarter loss due to improved operating efficiencies and lower costs,” RHI said.

RHI said consolidated revenues dropped 44% to P1.5 billion, from P2.7 billion for the same period last crop year as raw sugar sales fell by nearly P800 million. RHI said the group decided to “preserve its raw sugar mill share from its first quarter production for later refining and sales to achieve higher profitability.”

Sales contracts for refined sugar, however, went up by 27% to P1.67 billion in the first quarter, from P1.31 billion a year ago.

RHI’s sugar production was flattish at 1.554 million 50- kilogram ( Lkg) bags during the first quarter from 1.545 million Lkg bags for the same period last year. This, however, despite the late start of the milling season and the unseasonally wet weather conditions which affected its sugar cane harvesting operations.

Current milling operations started later than previous years, RHI said, in order to “optimize the advantages of milling more mature canes.” Central Azucarera de la Carlota, Inc. ( CACI) began operations in October, while Central Azucarera Don Pedro, Inc. ( CADPI) started milling in December.

To note, most sugar millers across the country have started milling later than the usual in the prior crop year due to the effects of the severe El Niño early last year which slowed down, if not completely deprived, sugarcanes from reaching optimum moisture content.

“The Group’s revenues are expected to accelerate in the coming quarters as CADPI started its refining operations in January and deliveries to customers of refined sugar under these sales contracts starts. We are also beginning to see positive effects across the Group from the upgrading efforts we undertook at our sugar and ethanol plants last year,” RHI Chairman Pedro E. Roxas said in the same statement.

Meanwhile, RHI said its board approved the issuance of a P523.75 million convertible note instrument to First Pacific Natural Resources Holdings, B.V., one of RHI’s major shareholders.

The note is convertible to RHI’s 125 million common shares at a price of P4.19 apiece to be issued out of an increase in capital stock.

The increase in RHI’s capital stock was approved by RHI’s board last December and will be presented for approval by stockholders.

To recall, the company completed in May last year its stock rights offering valued at P1.02 billion at P4.19 per share.

“We remain focused on achieving a significant increase in EBITDA (earnings before interest, tax, depreciation and amortization) to P1.7 billion this crop year which will largely finance the forecast P1.5 billion of capital expenditure to be undertaken this year to enhance the efficiency of RHI’s sugar and ethanol plants and thereby contribute to improved full-year results for the Group,” RHI Chief Finance Officer Celso T. Dimarucut was quoted as saying in the statement.

EBITDA is a way to measure a company’s operating performance and is equal to earnings before interest, tax, depreciation and amortization divided by total revenue.

Shares of RHI closed P2.85 apiece on Wednesday, up 0.35% from Tuesday. —