For the first quarter ended December 2016, JDW Sugar Mills (PSX: JDWS) performance has been phenomenal. Pakistans largest sugar mills topline grew by 13 percent year-on-year, while gross profit was up by 77 percent. Both gross and net margins expanded, and the bottomline grew by an astounding 354 percent year-on-year.
Sugar prices this year have been higher than last year, and that has been the main growth driver for JDW. Although the period under review has seen lower recoveries due to early crushing and unfavorable weather, the crop size is higher than the last crushing season. This would keep sugar production at par with last year, says the annual report.
Furthermore, the company has been able to save more bagasse for its power plants, enough to meet off-season requirements of both its co-generation plants. These plants came online in late 2014, and have seen an increase in electricity sales and are becoming a steady revenue stream for JDW.
The federal government has recently allowed export of sugar up to 225,000 MT without any export subsidy, valid until March 31st, 2017. Given the current international prices of sugar, the quarter ahead seems ripe for higher exports and even sweeter results.
Comments
Comments are closed for this article.