Sugar conglomerate swings back to profitability

MANILA, Philippines—Sugar conglomerate Roxas Holdings Inc. swung back to profitability in its fiscal year ending September 2012, also chalking up the highest ever profit in its 85-year history.

RHI disclosed to the Philippine Stock Exchange that it had posted a net income after tax of P667 million for the fiscal year.

The group incurred consecutive net losses of P765 million for three months ending Sept. 30, 2011 (its new fiscal cut-off) and P742 million for the 12-month period ending June 30, 2011. RHI started reporting its financial statement based on a fiscal year ending September only this year.

RHI’s earnings before interest, taxes, depreciation and amortization (Ebitda) also reached a record high of P1.6 billion, topping the P1-billion Ebitda in 2010.

Pedro Roxas, RHI chairman, attributed the turnaround to the new management’s focus on improving sugar sales margins and containing production and operating costs. He also said the group was planning major strategic measures to prepare the company for increased global competition due to reduction in tariff of sugar imports from 48 percent in 2010 to 5 percent in 2015.

President Renato Valencia explained that RHI’s revenues for the year dropped slightly to P7.7 billion from P7.9 billion a year ago due to relatively higher sugar prices at the time. The group’s gross profit, however, jumped to P1.7 billion compared to only P226 million a year ago.

RHI is the Philippines’ largest raw sugar producer and second-largest refinery. It manages and owns 100 percent of Central Azucarera Don Pedro Inc. in Nasugbu, Batangas, and Central Azucarera de la Carlota Inc. and Roxol Bioenergy Corp. in La Carlota, Negros Occidental. RHI holds a 45 percent-stake in affiliate Hawaiian-Philippine company.