Karachi January 28 2022: For the first quarter, Shahtaj Sugar Mills Limited profitability increased by 6 times compared to the same period last year as per company filling at the exchange.
Company recorded a turnover of PKR 1,563.34 million as against PKR 846.40 million in the corresponding period of 2020. For the season 2021-22, the crushing of sugarcane in Central Punjab started on November 20, 2021. In Central Punjab, early start of season always has negative impact on sugar recovery because of premature sugarcane crop and this will affect the sugar production during the season. However, in compliance with the Government of Punjab Notification, we commenced our crushing season on the notified date.
There is an increase in production from 22,107 tons to 27,907 tons with high crushing of sugarcane of 333,530 tons compared to 245,065 tons in the same period last year. However, recovery percentage of sugar is less as of the corresponding period of last year due to premature sugarcane crop with low sucrose contents because of weather conditions. Molasses recovery is also less than the corresponding period of last year.
Sugar prices during the three month period were better than the corresponding period of last year due to shortage of sugar in market. Further molasses prices during the period under review were lesser as compared to corresponding period due to low international prices of ethanol.
The cost of sales was PKR 1,261.80 million as against PKR 742.89 million of the corresponding period. Thus, the Company made a gross profit of PKR 301.54 million for the first quarter ended 31 December 2021 as against a gross profit of PKR 103.50 million of the corresponding period.
The net profit has been recorded at PKR 107.33 million against the profit of PKR 17.79 million of the corresponding period.
The finance cost for the period was PKR 55.92 million as against PKR 12.29 million of the corresponding period due to high utilization of banking facilities.
As informed earlier company is in the process of setting up a Bagasse based Power Project of installed gross capacity of 32 MW with 15 MW spillover to the National Grid. Two steam turbines of generation capacity of 16MW each have been installed successfully. Work on the construction of Switch Yard of 132 KV is in progress. Further, your Company has been granted Generation License and Upfront Tariff for 30 years by National Electric Power Regulatory Authority (NEPRA).
Company had negotiated and finalized the Energy Purchase Agreement (EPA) with Central Power Purchasing Agency (CPPA) which was subsequently approved by the Board of Directors of CPPA. The CPPA has not yet signed off the negotiated EPA till date.
Consequently, the Company along with five (5) other Bagasse Based Cogeneration power projects filed writ petitions in the Honorable Islamabad High Court against Federation of Pakistan, CPPA (G) L, NEPRA and others against the impugned decision of Cabinet Committee on Energy (CCoE). Subsequently, the Honorable Court had referred the matter to the Federal Minister for Energy to consider the petitioners’ grievances, keeping in view the fact that they have invested huge amounts in power projects on the reliance of Government Policy. Recently, the minister for energy gave his recommendation to the court for policy advice to NEPRA to review our up-front tariff in the light of CCoE decision.
The court has directed to NEPRA to revalidate our notified up-front tariff as per the decision dated February 27, 2019 of the Cabinet Committee on Energy (CCoE) and the decision dated August 08, 2020 by the Council of Common Interests. We are hopeful for the favorable outcome of the NEPRA decision. Our next date of hearing in the Islamabad High Court on the Power Project is February 03, 2022.
Shahtaj Sugar Mills Limited was incorporated in Pakistan on 27 March 1965 as a public limited company under the Companies Act, 1913. It is engaged in the manufacture and sale of sugar whereas molasses and bagasse are its significant by-products.