Integrated sugar and ethanol producer Roxas Holdings Inc. posted a net loss of P1.9 billion in fiscal year ending September 30, 2019, a sharp reversal a profit of P55 million in the previous year on write-downs and lower sugar production.
RHI said in a disclosure to the stock exchange the group recognized non-recurring losses of P1.1 billion during the last quarter of the fiscal year due mainly to the de-recognition of certain deferred tax assets.
RHI executive vice president and chief finance officer Celso Dimarucut said the der-ecognition of certain deferred tax assets was required by accounting standards and would not have any impact on the cash flow of the group.
The company also faced a very tough market during the past year.
Philippine sugar output for crop year 2018-2019 was down 17.1 percent year-on–year to 2.072 million metric tons due to unfavorable weather conditions.
“Talks on the liberalization of the sugar industry were also rampant during the period, causing a softening of sugar prices, while feedstock costs continue to increase. Our results reflect the impact of these challenges,” said RHI chairman Pedro Roxas.
Consolidated revenues ending September increased to P13.3 billion, including sales from discontinued operations amounting to P6.3 billion.
The higher sales volume and price of alcohol, as well as milling revenues amounting to P1.5 billion boosted total revenues.
Consolidated net loss before non-recurring losses amounted to P769 million from a net income of P55 million in the previous year as a result of higher feedstock costs, lower sugar production volume and increases in interest costs.
“While we continue to strive to reduce our overall level of indebtedness, higher interest rates partially negated the impact of these efforts,” Dimarucut said.
Net debt dropped from P10.7 billion in 2018 to P9.8 billion in 2019.
The company used the net proceeds from the sale of certain assets in November to further reduce long-term debt by close to P900 million.
“We will continue to look for opportunities to significantly reduce our debt levels,” Dimarucut added.
The sugar business grappled with some challenges during the period but the group’s ethanol business achieved some operational improvements in 2019 due to upgrades in equipment and systems.
“Our ethanol units registered the highest production volumes in the past three years, better than the target for 2019,” the company said.