The Market Monitor Minding the Nation's Business
Listed Roxas Holdings Inc. (RHI) reported a consolidated net income of P102 million for its fiscal year ending September, which was 451 percent higher than the P18.5-million profit recorded a year earlier.
Earnings before interest, tax, depreciation and amortization (EBITDA) improved by 34 percent to P1.3 billion from P1.0 billion in 2015.
Consolidated revenues jumped 47 percent to P12.1 billion in 2016 from P8.2 billion in 2015 as the sugar business unit saw its revenues rise to P7.8 billion from P5.6 billion and the alcohol business unit revenues increased to P4.2 billion in 2016 from P2.6 billion in 2015.
Consolidated gross income was unchanged as the overall gross income margin declined to 8.9 percent in 2016 from 12.7 percent in 2015.
The 2016 crop year recorded average prices of raw and refined sugar hitting five-year highs.
Combined tons of cane milled (TCM) for the Batangas and Negros plants rose 5 percent to 2.7 million tons in 2016.
The group’s cane sourcing expenses grew to P1.3 billion from P1 billion, significantly reducing the gross income margin of RHI’s sugar business to 8.1 percent in 2016 from 11.3 percent in 2015.
RHI President and CEO Hubert Tubio said the next crop year would bring benefits for tge company as it upgrades sugar plants that is expected to result in the reduction of overall cost of production.
Tubio said the company is also enhancing its relations with planters to improve harvests.
The Hawaiian-Philippine Company (HPCo), an affiliated company, mitigated the reduction in gross income of RHI’s two sugar plants.
The group’s share in HPCo‘s net income rose to P212 million in 2016 from P134 million in 2015.
The alcohol business unit’s gross income increased by 46 percent in 2016, benefiting from the full-year impact of the acquisition of San Carlos Bioenergy Inc. (SCBI) in May 2015.
SCBI underwent plant efficiency during the first quarter that led to higher ethanol production, but higher cost of molasses brought the alcohol unit’s gross income margin dropping to 5.4 percent in 2016 from 5.9 percent in 2015.
RHI Chairman Pedro Roxas said the group’s investments on plant expansion would lead to the company becoming the biggest ethanol producer with the combined capacity of Roxol Bioenergy Corporation (RBC) and SCBI at 285,000 liters per day.
EVP and CFO Celso Dimarucut said that since 2015, RHI had made significant investment on its alcohol unit with total capital expenditures at P900 million in 2016 and P1.1 billion in 2015.
An additional P1.5 billion has been earmarked for 2017 the plant expansion. RHI raised P1.1 billion in 2016 through a stock rights offering and P1.7 billion in 2015 from the sale of treasury shares.
RHI’s debt totaled P8.6 billion by the end of last September. Roxas said RHI has set its target of achieving P1.7 billion in Ebitda for the new crop year with a focus on debt reduction. RIZA LOZADA