May 04, 2018
RHI's 1st Half EBITDA increases 5% to PhP761M and Net Income 5% to PhP80M
MANILA, PHILIPPINES — Listed sugar and ethanol producer Roxas Holdings, Inc. (RHI) (PSEi: ROX) reported today that its Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA] and its Consolidated Net Income After Tax (NIAT) for the first six months of Crop Year (CY) 2017-2018 both increased by 5% in the previous year despite a challenging environment.
Based on it's unaudited financial and operating results for the first six (6) months ended 31 March 2018, RHI’s EBITDA rose to PhP761 million from PhP725 million and its NIAT climbed to PhP80 million from PhP76 million.
RHI’s consolidated revenues increased 8% to PhP5.3 billion, from PhP4.9 billion in 2017, against a backdrop of low sugar prices in the first quarter and a drop in national sugar production.
The sugar industry reeled from low prices early in the period due to increased the competition brought by lower-priced High Fructose Corn Syrup (HFCS). However, with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law that imposed a higher excise tax on sugar-sweetened beverages (SSBs) using HFCS, institutional customers have shifted back to sugar.
Chairman Pedro E. Roxas said the prevailing demand for sugar is expected to soften the impact of the lower prices of sugar experienced early in the semester. “The shift in demand allowed the sugar industry to regain lost market share. With this development, we expect sugar prices to improve,” Mr. Roxas said.
President & CEO Hubert D. Tubio noted that, with the changes in sugar allocation that took effect in January this year, sugar prices are expected to stabilize. “We expect sugar prices to stabilize with the Sugar Order 1A issued by the Sugar Regulatory Administration, which addressed concerns arising from an estimated fall in national sugar production to 2.27 million metric tons this year from 2.5 million metric tons due to unfavorable weather conditions,” Mr. Tubio said.
Mr. Tubio added that RHI continues to implement programs geared to further improve operations and the reliability of its plants. “While we have completed the installation of new equipment at both our sugar and ethanol plants, we will continue
to invest in other equipment to further boost our operations,” he stated.
Furthermore, Mr. Roxas said that RHI and its subsidiaries, the RHI Group, were able to balance the impact of the lower prices of domestic sugar and ethanol, and the wet weather, vis-à-vis the current downtrend in the world sugar market --- driven by the large surpluses in India and Thailand, and the jittery world ethanol market. “There were challenges but the RHI Group was able to weather the storm --- turning in a gross profit of PhP660 million for the period from PhP603 million in the previous year,” Mr. Roxas said.
Executive Vice President & CFO Celso T. Dimarucut said the Group’s interest expense increased slightly to PhP212 million from PhP210 million due to somewhat higher working capital, which he noted. “However, we hope to pare down our debt and reduce our interest expense in the next two to three years.”
RHI’s EBITDA increased to PhP761 million while the Group’s Net Income for the second quarter was up 1% to PhP190 million from PhP188 million for the same period last year.
Mr. Dimarucut noted that the Group’s performance in the last two quarters of the Crop Year would likely improve. “The improvement in the prices of sugar and ethanol, brought about by recent developments, is expected to further strengthen
the Group’s financial performance,” the CFO explained.
This press release may contain some statements which constitute “forward-looking statements” that are subject to a number of risks and uncertainties that could affect RHI’s business and results of operations. Although RHI believes that expectations reflected in any forward-looking statements are reasonable, it cannot guarantee future performance, action or events.
For further information, please contact:
Roulee Jane F. Calayag
Stakeholder Relations & Corporate Communications
(02) 771 7800-05
RHI is listed on the Philippine Stock Exchange (PSEi: ROX). Further information can be obtained by visiting the web at www.roxasholdings.com.ph