Sugar companies enjoy sweet earnings

A Thành Thành Công Biên Hòa JSC factory. The company reported revenue of VNĐ14.9 trillion, up 15.6 per cent compared to the previous year. — Photo the courtesy of SBT

Many businesses in the sugar industry reported fruitful earning results for the fiscal year 2020-2021.

Lam Sơn Sugar Joint Stock Corporation (LSS) reported revenue of VNĐ831 billion (US$36.4 million) in the fourth quarter of the 2020-2021 fiscal year, with profit after tax of VNĐ16 billion, up 82.5 per cent and 120 per cent respectively. For the whole year, the company achieved revenue of VNĐ1.85 trillion, and profit after tax of VNĐ24 billion, up 9.3 per cent and 27 per cent respectively.

Sơn La Sugar JSC (SLS) achieved profit after tax of VNĐ164 billion for the whole year, up 38 per cent, but revenue decreased compared to the previous year, down 23.6 per cent to VNĐ801 billion. SLS exceeded its profit target for the year by VNĐ138 billion.

In the fourth quarter of the year, SLS recorded profit of VNĐ76 billion, up 31 per cent year-on-year and contributing 46.3 per cent to total annual profit.

Thành Công - Biên Hoà Joint Stock Company (SBT) reported revenue of VNĐ14.9 trillion, up 15.6 per cent, with profit reaching VNĐ674.6 billion, up 86 per cent.

In the fourth quarter, the company's revenue reached more than VNĐ4.15 trillion, up 10.2 per cent over the same period last year. Profit after tax reached VNĐ195 billion, down 9.3 per cent.

SBT attributed the positive growth to the company's effective sales policy, market share expansion in product segments and optimisation of supply chains and well-controlled input costs.

Kon Tum Sugar Joint Stock Company announced fourth-quarter revenue of VNĐ80.4 billion, equivalent to the same period last year.

However, thanks to the lower cost of goods sold, the company's profit after tax reached VNĐ3.34 billion, a strong increase compared to VNĐ900 million the previous year. In the whole year, the company recorded a revenue of VNĐ248.2 billion, up 62 per cent year-on-year, and profit after tax reached VNĐ5.87 billion, up 196 per cent.

Rising prices

The strong recovery of world raw-sugar prices drove the positive results. According to the International Sugar Organisation (ISO), in the first half of June 2021, the price index of raw sugar and white sugar remained high.

The average price of white sugar in June was $449.1 per tonne, slightly lower than in May but still higher than in March and April. The average price of raw sugar over 6 months also rose from the previous months.

In the domestic market, sugar prices also benefited from a new policy.

The imposition of anti-dumping and anti-subsidy taxes by the Ministry of Industry and Trade on sugar from Thailand limited imports, making supply and demand more balanced, pushing up sugar prices.

Lê Trung Thành, vice chairman of Lam Sơn Sugar Joint Stock Corporation Board of Directors, said that the price of finished sugar had increased by 20 per cent compared to the same period last year.

"LSS has careful preparation steps, expecting a new fiscal year with more prosperous business results,” he said

Thành said the company spent VNĐ30 billion to invest in growing sugarcane, fertiliser and farming techniques. As a result, the number of farmers returning to sugarcane farming increased by about 20 per cent compared to the previous year, ensuring growth in the new period.

The purchase price of raw sugar cane had increased sharply in recent years, from 900,000 to VNĐ1.1 million per tonne, and was expected to increase to VNĐ1.2 million per tonne in the new crop, he said.

However, in the short term, sugar enterprises were facing challenges due to the fourth outbreak of COVID-19. If the pandemic was well controlled, all production and business activities would return to normal, especially the sugar enterprises as they mainly served the domestic market, he said.

“The transportation of goods to factories is also limited, drivers must comply with regulations on disease prevention and COVID-19 testing,” he added.

An industry insider said when the Ministry of Industry and Trade applied anti-subsidy and anti-dumping taxes on sugar imported from Thailand, there were cases of more sugar being imported from other countries such as Malaysia, Indonesia and Cambodia.

The imposition of anti-dumping and anti-subsidy taxes on refined and raw sugar imported from Thailand would last for five years, officially effective from June 16, 2021, he said. This was expected to remove difficulties and challenges for local sugar businesses who had to compete with cheap Thai sugar flooding the domestic market. VNS