Press Releases

December 06, 2017

RHI Posts 135% Increase in Core Net Income to PhP240M EBITDA on target at PhP1.6B, increases by 22%

MANILA, PHILIPPINES — Listed sugar and ethanol producer Roxas Holdings, Inc. (RHI) (PSEi: ROX) today announced its audited financial and operating results for the year ended September 30, 2017 with reported Consolidated Net Income After Tax (NIAT) of PhP120 million, 18% higher than the PhP102 million for the same period last year, driven by the strong performance of its sugar business. Excluding non-recurring expenses of PhP120 million, Core Net Income stood at PhP240 million, 135% higher than that of the same period last year.

Consolidated EBITDA for the period reached PhP1.6 billion, 23% higher than that of the same period last year, excluding non-recurring expenses. This is the second year of sustained growth in EBITDA with last year’s 35% increase in EBITDA to PhP1.3 billion from PhP995 million a year before.

EBITDA Margin stood at 15%, higher than the 11% recorded in the same period last year. Chairman Pedro E. Roxas noted that the sustained improvement in EBITDA was a result of the long-term initiatives undertaken by the Group.

Sugar Business Segment

Revenues from the sugar business represented 67% of Consolidated Revenues and at PhP7.3 billion, were 7% lower from the PhP7.8 billion in the same period last year due to a decline of 15% in average sugar prices which was lower than the estimated percentage drop in national sugar prices. Despite the reduction in revenues, gross income from the sugar business increased to PhP1,164 million, 38% higher than the PhP844 million recorded for the same period last year, due principally to improved production volume and efficiency at the plants. The Group’s sugar business milled 3.461 million metric tons of cane (TCM) for the period, up 26% from last year’s 2.748 million TCM. It also produced 6.497 million 50-kg (LKg) bags of sugar for the period, surpassing last year’s production of 5.102 million LKg. RHI President and CEO Hubert D. Tubio said that “the improved relationship we have with planters and the upgrades that we implemented for the equipment and processes at our plants have paid off”. “We were able to reduce the overall costs of production, which also alleviated the impact of the soft prices of sugar,” Mr. Tubio added.

Ethanol Business Segment

Meanwhile, revenues of the Group’s ethanol business segment slid 14% to PhP3.6 billion from PhP4.2 billion while volume was steady at around 70 million liters as a result of lower average price of ethanol. The price of ethanol is generally linked to the price of sugar and molasses, which are the main feedstock in the production of ethanol. Notwithstanding the lower revenues, the ethanol business segment’s gross income improved to PhP293 million, 28% higher than the PhP229 million reported in the same period last year. The operations of the ethanol business unit were adversely affected by delays due to prolonged periods of enhancement works at the plants in the early part of the year. The ethanol unit, however, steered back to profitability toward the end of the period as plant repair and expansion works ended. The Group expanded the production capacity of its ethanol business to 82 million liters of ethanol per year. “We are hopeful that the expanded capacity and improved efficiency of the Group’s ethanol business unit will underpin the continued growth of the business,” Mr. Roxas added.

Conclusion

The Group’s Gross Profit climbed 36% to PhP1.457 billion from last year’s PhP1.073 billion. EVP & CFO Celso T. Dimarucut said: “Despite the challenging market conditions, the Group hit the PhP1.6 billion mark we set for the EBITDA as we focused on achieving higher production volume and efficiencies”.