By James A. Loyola
Integrated sugar and ethanol producer Roxas Holdings, Inc. reported a net loss of ₱1.9 billion for the fiscal year ending September 2019 from a net income of ₱55 million for the same period last year.
In a statement, RHI said the group recognized non-recurring losses of ₱1.1 billion during the last quarter of the fiscal year due mainly to the derecognition of certain deferred tax assets.
RHI Executive Vice President and Chief Finance Officer Celso T. Dimarucut said that “the derecognition of certain deferred tax assets was required by accounting standards and would not have any impact on the cash flow of the Group.”
“We faced a very tough market during the past year. Philippine sugar output for Crop Year 2018-2019 was down 17.12 percent year-on–year at 2.072 million metric tons due to unfavorable weather conditions,” said RHI Chairman Pedro E. Roxas.
He added that, “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.”
Consolidated revenues increased to ₱13.3 billion (including revenue from discontinued operations amounting to ₱6.3 billion) attributable to higher sales volume and price of alcohol.
Also contributing to the growth was milling revenues amounting to ₱1.5 billion recognized following the adoption of the Philippine Financial Reporting Standard (PFRS) 15 regarding ‘Revenue Recognition.’
Consolidated Net Loss before non-recurring losses amounted to ₱769 million from net income of ₱55 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 decreased from ₱10.7 billion in 2018 to ₱9.8 billion in 2019. Net proceeds from the sale of certain assets in November 2019 were used to further reduce long-term debt by close to ₱900 million.
“We will continue to look for opportunities to significantly reduce our debt levels,” Dimarucut added.
RHI President & CEO Hubert D. Tubio also noted that while the sugar business grappled with some challenges during the period, the Group’s ethanol business achieved some operational improvements in 2019 due to the upgrades in its equipment and systems.