First Pacific-led sugar firm Roxas Holdings Inc. (RHI) incurred a net loss of P125 million in the quarter ending December 2015, the first quarter of its fiscal year, due to operational challenges at two of its plants.
In the same quarter last year, RHI reported a net profit of P9 million, a filing in the Philippine Stock Exchange showed.
RHI chair Pedro Roxas said the October to December period was historically a weak season and the situation was compounded by the combined impact of cane supply insufficiency, late startup in its Batangas plant and the temporary shutdown of its newly acquired plant.
RHI president and chief executive officer Hubert Tubio said the combined gross profit of Central Azucarera de la Carlota Inc. (CACI) and Roxol Bioenergy Corp. (RBC)—both in La Carlota City, Negros Oriental—was not sufficient to cover the group’s total expenses for the period.
He also said Negros-based ethanol producer San Carlos Bioethanol Inc., which the group acquired in May last year, had to temporarily cease operations to give way for enhancement initiatives to improve plant efficiencies.
However, Tubio believes this is a temporary setback. In the coming quarters, he expects the group’s performance to improve, resulting in an anticipated increase in core net income in the 2016 crop year versus last year.
The RHI group is currently sprucing up its plants and has allocated a capital spending budget of P1.4 billion for the current crop year to address operational challenges.
The group plans to raise fresh capital from an offering of new shares to existing shareholders. Its board of directors recently approved an offering of stock rights, the final terms and conditions of which have yet to be finalized.
The First Pacific group controls 51 percent of RHI through subsidiary First Agri Holdings Corp.