MANILA, PHILIPPINES — Integrated sugar and ethanol producer Roxas Holdings, Inc. (RHI) (PSEI: ROX) today announced its unaudited financial and operating results for the first quarter of Crop Year 2016 – 2017 with a

Consolidated Net Loss of PhP112.3 million, an improvement on the PhP124.8 million net loss for the same period last year. Despite lower revenues recognized during the current period, the Group reduced its first quarter loss

due to improved operating efficiencies and lower costs.

RHI timed the start of its current milling operations later than in previous years to optimize the advantages of milling more mature canes. Central Azucarera de la Carlota, Inc. (CACI) started its operations in October while Central Azucarera Don Pedro, Inc. (CADPI) begun milling in December 2016.

Notwithstanding the later start of the milling season and the unseasonally wet weather conditions which hampered sugar cane harvesting operations, the Group managed to slightly improve sugar production to 1.554 million Lkg bags (50-kg bags) from 1.545 million Lkg bags for the same period last year, driven by operating efficiencies and improvements in relationships with planters-partners.

 

Consolidated Revenues decreased to PhP1.5 billion, from PhP2.7 billion for the same period last year due to a reduction in raw sugar sales by almost PhP800 million as the Group opted to preserve its raw sugar mill share from its first quarter production for later refining and sales to achieve higher profitability. Sales contracts for refined sugar, however, already booked increased to PhP1.668 billion as of the current quarter, or 27% higher than the PhP1.312 billion for the same quarter last year.
 

RHI Chairman Pedro E. Roxas said, “The Group’s revenues are expected to accelerate in the coming quarters as CADPI started its refining operations in January and deliveries to customers of refined sugar under these sales

contracts starts. We are also beginning to see positive effects across the Group from the upgrading efforts we undertook at our sugar and ethanol plants last year.”
 

President and CEO Hubert D. Tubio noted that, “The cost of goods sold for the period improved resulting in a higher gross profit rate, from 4% in the first quarter of 2016 to 7% in the current Crop Year. The earlier organizational realignment, taken together with the upgrading of our equipment and processes, has reduced expense levels during the first quarter. We expect this trend to continue throughout the balance of the current Crop Year.”
 

In another development, the Board of Directors approved, earlier today. the issuance of a PhP523.75-million Convertible Note (the “Note”) to First Pacific Natural Resources Holdings, B.V., one of RHI’s major shareholders.
 

The Note is convertible to 125 million common shares of the Company at a price of PhP4.19 per share, which will be issued out of an increase in capital stock. The increase in RHI’s capital stock was approved by RHI’s Board of

Directors on December 1, 2016 and will be presented for approval by Stockholders in the Annual Stockholders’ Meeting on February 15, 2017.
 

In May 2016, the Company completed its Stock Rights Offering (SRO) valued at PhP1.02 billion at PhP4.19 per share.
 

CFO Celso T. Dimarucut said, “The issuance of the Convertible Note and the SRO in 2016, demonstrate the shareholders’ strong support for RHI and will contribute to a significant improvement in the Company’s overall financial position.
 

We remain focused on achieving a significant increase in EBITDA to PhP1.7 billion this Crop Year which will largely finance the forecast PhP1.5 billion of capital expenditure to be undertaken this year to enhance the efficiency of RHI’s sugar and ethanol plants and thereby contribute to improved full-year results for the Group.”