VMC earnings drop 57.9% to P181M
EARNINGS of Victorias Milling Co., Inc. (VMC) in the third quarter ended on May 31 dropped by 57.90% due to a decline in sugarcane production and a late start in its distillery operations.
In its quarterly report filed with the bourse on Tuesday, the company said it ended the third quarter of crop year 2017 to 2018 with a net income of P181.04 million.
This led to a total of P418.14 million in earnings for the first nine months of the crop year, 55.25% lower from the year-ago level. Its net income margin narrowed during the period to 7.2% from 7.5% a year ago.
The company’s overall revenue likewise dropped 19.5% to P1.62 billion as both price and volume of its sugar, molasses and alcohol were lower from a year ago.
This was tempered by a 48.2% increase in tolling revenues.
In the first three quarters of the crop year, VMC milled 2.88 million tons of cane sugar, down by 3.3% amid the 9.1% overall decrease in sugarcane production in Negros.
Despite this, VMC’s market share went up to 23.5% from 22.1% in the province while its nationwide share likewise inched up to 12.3% from 11.5%. VMC noted an increase in direct cane deliveries.
Meanwhile, raw sugar production went down by 5.1% to 5.31 million 50-kilogram bags (LKG). Recovery dropped to 1.86 LKG per ton cane milled from last year’s 1.88 LKG per ton cane milled.
Molasses output, on the other hand, went up by 1.2% to some 136,480 metric tons in the first nine months of the crop year.
Likewise, total production of refined sugar increased by 12.6% year-on-year to 4.63 million LKG due to the company starting its refinery operations earlier.
The distillery operations, which only began on January after a hiatus, saw a 47.4% drop year-on-year in alcohol production to 3.38 million liters. The company postponed its operations to make way for expansion and dehydrator projects.
“[Crop year 2016 to 2017] was a banner year in terms of cane production and the decline in cane supply and sugar recovery in the current crop year negatively affected all stakeholders in the sugar industry, not just the Group,” VMC said in the report.
VMC sells raw sugar, alcohol and molasses to Interbev Phils., Inc., Tanduay Distillers, Inc. and Absolute Distillers, all subsidiaries of LT Group., Inc. which has a significant interest in the firm.
Shares in VMC closed dropped a centavo or 0.40% to close at P2.50 apiece.