Sugar companies (LSS) enjoy sweet earnings
Sugar companies (LSS) enjoy sweet earnings
Many businesses in the sugar industry reported fruitful earning results for the fiscal year 2020-2021.
Lam Son Sugar Joint Stock Corporation (LSS) reported revenue of VND831 billion (US$36.4 million) in the fourth quarter of the 2020-2021 fiscal year, with profit after tax of VND16 billion, up 82.5 per cent and 120 per cent respectively. For the whole year, the company achieved revenue of VND1.85 trillion, and profit after tax of VND24 billion, up 9.3 per cent and 27 per cent respectively.
Son La Sugar JSC (SLS) achieved profit after tax of VND164 billion for the whole year, up 38 per cent, but revenue decreased compared to the previous year, down 23.6 per cent to VND801 billion. SLS exceeded its profit target for the year by VND138 billion.
In the fourth quarter of the year, SLS recorded profit of VND76 billion, up 31 per cent year-on-year and contributing 46.3 per cent to total annual profit.
Thanh Cong - Bien Hoa Joint Stock Company (SBT) reported revenue of VND14.9 trillion, up 15.6 per cent, with profit reaching VND674.6 billion, up 86 per cent.
In the fourth quarter, the company's revenue reached more than VND4.15 trillion, up 10.2 per cent over the same period last year. Profit after tax reached VND195 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 VND80.4 billion, equivalent to the same period last year.
However, thanks to the lower cost of goods sold, the company's profit after tax reached VND3.34 billion, a strong increase compared to VND900 million the previous year. In the whole year, the company recorded a revenue of VND248.2 billion, up 62 per cent year-on-year, and profit after tax reached VND5.87 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.
Le Trung Thanh, vice chairman of Lam Son 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
Thanh said the company spent VND30 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 VND1.1 million per tonne, and was expected to increase to VND1.2 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.
