Victorias Milling posts higher profit

MANILA, Philippines - Listed sugar miller Victorias Milling Co. Inc.(VMC) registered a 52 percent increase in net income in the first quarter of its fiscal year on increased raw sugar sales.

In a regulatory filing, the company reported a consolidated net income of P222.70 million in the first quarter of its fiscal year ending Nov. 30, 2013 against  P1476.59 million in the same period in 2012.

The company raked in revenues of P1.39 billion ending November against P1 billion in the comparative period.

Its raw sugar sales rose to P932.86 million ending in November from P561.03 million in the same period in 2012. Sold during the period were 265,206 50-kilogram bags of raw sugar compared to 2013 comparative period.

The average raw sugar price for the three-month period was P1, 331 per 50-kilogram bag, higher than P1, 293 price per 50-kilogram bag in the same period in 2012.

Alcohol sales rose to P60.89 million from the previous P8.40 million. Sales of other products rose to P13.44 million from P6.17 million.

Sales of molasses, however, fell to P29.25 million from P58.63 million. Tolling revenues fell to P354.17 million from the previous earnings of P374.46 million.

The company is allocating P239 million in capital expenditure for the current crop year to improve its operations and replace major equipment and equipment parts used in raw and refined sugar production.

The entire expenditure would be sourced from funds generated from operations.

VMC is engaged in integrated raw and refined sugar manufacturing. It’s plant facilities are located in Victorias City, Negros Occidental.

It has subsidiaries engaged in fish canning, real estate, sugar sacks manufacturing and packaging, and golf course and restaurant operations

The operating subsidiaries of VMC include Victorias Foods Corp., Victorias Agricultural Land Corp., Canetown Development Corp., Victorias Golf and Country Club, Inc., Victorias Quality Packaging Company, Inc., and Victorias Industrial Gases Corporation.

The company has been paring down its debt to strengthen its balance sheet as it ugrades its production facilities in preparation for heightened competition when sugar tariffs across the Association of Southeast Asian Nations is reduced to between five percent to zero by 2015.

Last December it announced that it had reached a settlement with its creditors to convert part of its existing debts to equity. Its Board of Directors approved the conversion of P70.05 million worth of convertible notes into equity which is equivalent to 70,049, 966 shares pursuant to the debt restructuring agreement with various creditors.

In April, the company approved to pre-pay part of its restructured loans. Its board approved  the pre-payment to its creditors on May 31, 2013 the amount  P709.4 million and $3.24 million in accordance with its debt restructuring agreement.

It began to encounter financial difficulties in the mid 1990s after failing to contain rising overhead costs against falling domestic sugar prices.

It was also unable to compete with new and expanded sugar mills and refineries.

The Securities and Exchange Commission (SEC) approved its rehabilitation plan in 2000 which includes debt elimination.