JDW Sugar Mills has really outdone itself in the most recent quarter, with an 8 percent jump in sales year-on-year and an enormous 118 percent growth in bottom line. Net margins doubled to 6 percent, returning to the levels once seen in FY11 - back in the days when the sugarcane price was.
Finance cost was up by 35 percent mainly due to borrowings for the co-generation projects; JDW successfully added two 26MW power plants in June and October of last year, which are using the bagasse produced internally for generation of electricity. These newly added segments are not to be taken lightly; for 6MFY15, the electricity sold to NTDC stood at over Rs2 billion.
At a time when the sugar industry is under a lot of strain due to the high prices of sugarcane, JDW has done incredibly well. There are few reasons for this - firstly, JDW has the highest recovery levels in the country. This gives its gross margins a significant boost.
Secondly, some policies from the government over the period under review have proved beneficial - an export subsidy of Rs10 per kg on 650,000 tons of sugar was announced at the start of 2015 and carried through into May. It seems the company was able to capitalize on this opportunity. Moreover, the import tariff on sugar imports was raised from 20 percent to 25 percent and then again recently to 40 percent to protect the local players.
Finally, it must be noted that this year, twelve days of Ramadan fell in June, as opposed to two days a year ago. It was during this period that sugar demand and prices shot up, and thus gave a minor boost to JDWs top line and margins.

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J.D.W Sugar Mills Limited
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Rs (Million)             9MFY15     9MFY14        YoY
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Net Sales                24,645     22,750         8%
Cost of Sales            20,933     20,131         4%
Gross Profit              3,712      2,620        42%
GP Margin                    15%        12%     up by
                                              300 bps
Administrative Expenses     640        399        60%
Selling Expenses             92        118       -22%
Other Income                529        242       119%
Other Expenses              349         67       421%
Finance Cost              1,838      1,361        35%
Profit Before Taxation    1,321        917        44%
Taxation                    201        219        -8%
Profit After Tax          1,522        698       118%
NP Margin                     6%         3%     up by
                                              300 bps
Earnings per share        25.47      11.68       118%
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