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Wednesday, April 28, 2004
VMC posts net income after seven years
THE Victorias Milling Company Inc. posted an audited net income of P31.5 million for crop year ending August 31, 2003, for the first time in seven years after the company was granted suspension of payment of its loans and was put under rehabilitation by the Securities and Exchange Commission (SEC).
The financial statements audited by Joaquin Cunanan/Price Waterhouse will be presented for stockholders' approval during their forthcoming meeting on April 30.
The company achieved an audited earning before interest, taxes, depreciation and amortization (EBITDA) of P743 million compared to P445 million of the previous crop year. This was due to the fact that while gross revenues were only two percent higher than the previous year, cost of sales were 14 percent lower compared to the previous crop year.
Lower cost in peso terms were incurred in spite of the increase in production.
VMC milled 2.8 million gross tons cane and produced 5.4 million bags raw sugar, both of which broke the records chalked last crop year. Molasses production reached 143,746 metric tons, 28 percent higher than the previous crop year.
On the other hand, refined sugar production decreased from 6.4 million bags to 6.3 million bags due to the Company's efforts to optimize its production level relative to its bagasse fuel supply.
As of February of the current crop year, VMC had endured an average 12 percent drop in raw sugar and molasses prices, which accounted for a P116 million drop in gross revenues. These, however, were cushioned by better refinery revenues that increased by P65 million and a net reduction of P30 million in cost and expenses.
The EBITDA for the period was P403 million compared to P425 million of the previous year.
VMC paid interest to bank creditors amounting to P204 million. These charges, coupled with higher off-season repairs and a drop in raw sugar prices, resulted to a net loss of P15.3 million for the first six months of the current crop year. In accordance with the Rehabilitation Plan, VMC will also pay the trade suppliers 25 percent of their exposure amounting to P90 million before August of this year.
VMC is currently undertaking a major expansion program totaling P808 million that includes a new 15 MW turbo-generator to replace aging power plants. These projects are funded by internally generated cash, P300 million cash infusion by Tanduay Holdings Inc. and the proceeds from advance sales of sugar and molasses.
This capital rollout program is designed to increase VMC's production levels of raw and refined sugar as well as achieve greater cost efficiencies and savings particularly in energy usage.
VMC's regular labor force has dipped below 1,500 level which is lower than the level of 1,700 ceiling set in the Rehabilitation Plan.
(April 28, 2004 issue)
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