Sindh Abadgar Sugar Mills : Transmission of Quarterly Report for the Period Ended 31 March 2023

UNAUDITED

HALF YEARLY FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2023

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COMPANY PROFILE

DIRECTORS	Mr. Deoo Mal Essarani	Chairman
	Dr. Tara Chand Essarani	Chief Executive
	Mr. Mahesh Kumar	Director
	Mr. Dileep Kumar	Director
	Mr. Pehlaj Rai	Director
	Mr. Mohan Lal	Director
	Dr. Besham Kumar	Director
	Mr. Muhammad Siddiq Khokhar	Independent Director
	Mr. Zafar Ahmed Ghori	Independent Director
	Ms. Maheshwari Osha	Independent Director
CHIEF FINANCIAL OFFICER	Mr. Saqib Ghaffar
COMPANY SECRETARY	Mr. Aziz Ahmed
BANKERS	Allied Bank Limited
	Askari Bank Limited
	Bank Al-Falah Limited
	MCB Bank Limited
	Bank AL Habib Limited
	United Bank Limited
	Meezan Bank Limited
	HBL Foreign Exch. Bank Limited
AUDIT COMMITTEE	Mr. Zafar Ahmed Ghori	Chairman
	Mr. Pehlaj Rai	Member
	Mr. Dileep Kumar	Member
	Dr. Besham Kumar	Member
HR AND REMUNERATION	Ms. Maheshwari Osha	Chairman
COMMITTEE	Mr. Mohan Lal	Member
	Mr. Dileep Kumar	Member
AUDITORS	M/s. Rahman Sarfaraz Rahim Iqbal Rafiq
	Chartered Accountants
REGISTERED OFFICE	209, 2nd Floor, Progressive Plaza, Beaumont Road,
	Karachi - Pakistan.
MILLS	Deh: Deenpur,
	Taluka. Bulri Shah Karim,
	Distt. Tando Muhammad Khan,
	Sindh-73024.
REGISTRAR	JWAFFS Registrar Services (Pvt) Ltd.
	407- 408, Al Ameera Centre,
	Shahrah e Iraq, Saddar, Karachi.
EMAIL ADDRESS	[e-mail]

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DIRECTORS' REPORT

Dear Members

Assalam o-alaikum,

On behalf of the Board of Directors, we are pleased to present before you the un- audited Condensed Interim Financial statements of the company for the six months ended on March 31st, 2023 together with the auditors' review report thereon;

Operational Results
		2022-23	2021-22
		Complete season	Complete season
Crushing Commenced		29.11.2022	28.11.2021
Crushing Ended		3.03.2023	17.03.2022
Days worked (Gross)	-Day	95	110
Sugarcane crushed	-Tons	485,128	474,176
Net crushing days	-Days	84	84
Daily average crushing	-Gross Days	5,107	4,311
Daily average crushing	-Net Days	5,775	5,645
Capacity utilization	-%	72	71
Sugar produced	-Tons	51,529	52,507
Sugar recovery	-%	10.63	11.08
Molasses produced	-Tons	22,574	20,723
Molasses %Cane	-%	4.66	4.37

Crushing of Sugar-cane commenced on 29th November, 2022 and mills remained operated for 95 days as compared to 110 days in the corresponding season. Despite, all-time high Sugar-cane prices and reduced number of operating days, crushing of Sugar-cane is more or less the same achieved at 485,128 M.T compared to 474,176 M.T in the last season. The Sugar extracted from it, however, decreased from 52,507 M.Tons produced in the last season to 51,529 M.Tons during the current season at a recovery of 10.63% compared to 11.08% in the previous season attributed to standing crop affected by dreadful flooding.

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Financial Results
	March 31st,	March 31st,
	2023	2022
	Rupees	Rupees
Profit before taxation	76,236,715	161,915,781
Taxation	(13,745,062)	(34,369,889)
Profit after taxation	62,491,653	127,545,892
Incremental Depreciation transferred from	40,759,457	43,807,657
surplus on revaluation of fixed
assets net of deferred tax
Accumulated Loss brought forward	(170,155,080)	(217,073,575)
Accumulated Loss carry forward	(66,903,970)	(45,720,026)
Earning per Share	5.99	12.23

The net sales swelled to Rs.1.79 billion compared to Rs.1.23 billion in the previous period with a gross profit achieved at Rs. 230.04 million compared to Rs. 240.42 million in the corresponding period. The selling price of sugar remained below the cost during the 1st quarter. However, it started appreciating in the 2nd quarter because of which the company earned after tax profit of Rs. 62.49 million after offsetting losses incurred in the 1st quarter. The financial cost remained a constant thorn for the company during the period under review amounting to Rs.148.83 million compared to Rs. 85.251 million in the corresponding period showing an increase of 75% amid frequent increase in the discount rate by the SBP which may prove to be disastrous for the survival of the industry. The earning per share stood at Rs. 5.99 as against the corresponding period of Rs.12.23.

Future Outlook:

Going forward, the sugar price is likely to remain firm due to less production of sugar than widely anticipated before the start of crushing season. However, due to recent increase in the price of sugar driven by increase in demand, the government has set the maximum ex-mill price at Rs. 95.57 per kg inclusive of sales tax by notification. Being aggrieved, the Millers have obtained stay order from the High Court of Sindh directing, the government not to take any coercive action until the next date of hearing. In spite of the court order, the price of sugar plunged sharply in the market from Rs. 115/- to Rs. 105/- per kg. However, is likely to remain stable in view of less production of sugar by 1.00 million M. Tons and the imported sugar price to be around Rs. 200 per kg, if allowed.

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The SBP last raised the discount rate to 21% in an effort to curb inflation which is hovering around 35% and is expected to remain high in the near term. This unprecedented increase in discount rate is having negative consequences on the sugar industry since sizeable short term borrowing is required at the inception of crushing season for payment to the growers against supply of Sugar-cane. The company is continuously expending significant amount in revamping its manufacturing process in order to achieve optimum operational productivity to mitigate the unabated increase of Sugar-cane price and financial cost.

Acknowledgement:

The board wishes to appreciate the efforts and dedication of all employees who worked with full devotion during the crushing season to attain the desired results to overcome the challenges faced by the company. The board also places on record appreciation and thanks to the bankers, growers and shareholders for their continued support cooperation and confidence reposed on us. Let's pray together to Almighty ALLAH for the success and betterment of the company in a dire economic crises faced by the country.

______________	______________
Tara Chand	Mahesh Kumar
Chief Executive	Director

Dated: 23rd May, 2023

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