MANILA, Philippines - Listed bio-sugar and bio-energy company Roxas Holdings Inc. (RHI) said its net income in 11 months plummeted almost 100 percent due to factory concerns and various plant repairs.
In a disclosure to the local bourse, RHI said its net income plunged to P19 million this year from P615 million a year ago after reflecting certain non-recurring redundancy expenses and tax adjustments.
RHI’s core net income also dipped more than 70 percent to P169 million from P645 million in 2014 due to several problems at the company’s plant.
“Our core income took a hit as our factories reeled from difficulties that prompted our sugarcane planters to go to other mills. This worsened the shortage of cane supply,” RHI chairman Pedro Roxas said.
Roxas added RHI had to spend approximately P700 million for new equipment and repairs to address the problems at the company’s plant.
Furthermore, Roxas noted RHI experienced a double whammy as it tried to plug the concerns in its plants while trying to combat the combined impact of declining sugar prices and escalating production costs prevalent in the global sugar market.
On the other hand, RHI’s ethanol businesses cushioned the impact of sugar with Roxol Bioenergy Corp. (RBC) and San Carlos Bioenergy Corp., Inc. (SCBI), posting net income of P215 million and P122 million, respectively.
Last May, RHI acquired SCBI which recently completed its expansion project that increased the plant’s capacity to 38 million liters from 32 million liters annually.
“To abate the impact of unpredictable sugar prices and the concomitant challenge of declining cane supply, alongside the factory problems and the ongoing repairs, RHI will tighten measures to prop up its sugar business and will maintain its focus on ethanol,” Roxas said.
Roxas said he is also confident the company will bounce back following the recent appointment of sugar industry veteran Hubert Tubio as new president and chief executive officer and Celso Dimarucut as chief finance officer.
RHI is the largest integrated sugar business in the Philippines which manages 100 percent of Central Azucarera Don Pedro Inc. in Batangas and Central Azucarera de la Carlota Inc. and Roxol Bioenergy Corp. in Negros Occidental, and majority of San Carlos Bioenergy.