Victorias Milling posts 10% profit hike to P344M in 9 mos

MANILA, Philippines - Listed sugar miller Victorias Milling Co. Inc. (VMC) reported a nearly 10-percent rise in net profit in the nine months ending May 31, 2012, mainly due to higher revenues.

Based on financial statements submitted to the Philippine Stock Exchange VMC posted net earnings of P343.86 million compared with almost P313 million in the same period a year ago.

Consolidated revenues climbed 16 percent to P3.595 billion on the back of a 96-percent jump in tolling revenues as volume increased.

Raw sugar revenues went up two percent due to the increase in volume sold by 69 percent.

Molasses revenues, however, declined 52 percent as average selling price decreased from P8,005 last year to only P3,219.62 per metric ton.

Distillery operations revenues amounted to P35.41 million, representing one million liters of denatured alcohol sold. The distillery started operations in November last year.

VMC attributed its positive performance to good weather conditions which resulted in higher output and good quality and matured canes.

The upgrading of equipment and machineries as well as intense marketing also contributed to VMC’s growth this year.

The sugar firm has set aside a total of P288 million for the replacement of defective machineries and equipment and the renovation of facilities.

Around P181 million has also been earmarked for the ongoing rehabilitation of the distillery plant to further improve the quality output of alcohol production.

The operation of the distillery plant is intended to boost the company’s revenues using its by-product molasses for the production and sale of alcohol.

Meanwhile, wholly-owned unit Victorias Foods Corp. trimmed its net operating loss 29 percent due to improved raw materials usage.

VMC is currently negotiating with its various shareholders/creditors to restructure its P5.86 billion debt. The company has proposed to prepay P500 million in convertible notes and convert into equity the remaining convertible notes and slash interest rates to eight percent from 10 percent per annum on the peso-denominated loans.

Upon completion of the P1.48 billion debt-to-equity conversion, creditor-banks are seen to raise their shareholdings in the sugar firm to 74 percent from 54 percent.

Among VMC’s creditor-banks include Philippine National Bank, East West Bank, Metrobank and Development Bank of the Philippines.