Sugar firms pick sweet fruits in 2020-2021 fiscal year

Higher sugar price relieved some of the concerns of sugar firms during the pandemic

Sugar producers like Lam Son Sugar JSC (LSS), Son La Sugar JSC (SLS), Thanh Thanh Cong Sugar JSC (SBT), or Kon Tum Sugar JSC (KTS) started the fiscal year on July 1 and end it on June 30 the following year. At this point of time, a strong of firms in the sector has announced very positive results for the 2020-2021 fiscal year.

In the last quarter of the past fiscal year LSS raked in VND831 billion ($36.13 million) in revenue and VND16 billion ($695,650) in after-tax profit, up 82.5 and 120 per cent on-year. For the whole fiscal year, LSS attained VND1.855 trillion ($80.65 million) in total revenue and VND24 billion ($1 million) in after-tax profit, up 9.3 and 27 per cent on-year, respectively.

SLS reported even greater profits with VND164 billion ($7.13 million) in post-tax profit for the 2020-2021 fiscal year, a 38 per cent jump despite a slight decrease in total revenue (VND801 billion – $34.83 million).

In Q4 of the fiscal year, SLS earned VND76 billion ($3.3 million) of profit, soaring 31 per cent on-year and pulling in 46.3 per cent of the full-year profit.

SBT also had a bumper fiscal year with revenue touching VND14.901 trillion ($647.87 million), up 15.6 per cent over the previous fiscal year, and profit reaching VND674.6 billion ($29.33 million), an 86 per cent jump.

SBT has attributed the rosy growth in profit to establishing an effective sales network, with share expansion in diverse product lines, optimisation of supply chains, and good control of input costs. Simultaneously, the company has focused on developing new product lines besides sugar in a bid to take advantage of the value of sugar cane.

Meanwhile, KTS has unveiled a Q4 revenue of VND80.4 billion ($3.5 million), equal to its performance a year ago.

Thanks to lower capital costs, the company’s after-tax profit came to VND3.34 billion ($145,220) compared to just VND900 million ($39,130) in the similar period last year. For the full fiscal year, KTS earned VND248.2 billion ($10.8 million) in total revenue and VND5.87 billion ($255,220) in profit, up 62 and 196 per cent on-year.

Quang Ngai Sugar JSC (QNS) posted VND3.689 trillion ($160.4 million) in revenue and VND521.5 billion ($22.67 million) in after-tax profit in the first half, hikes of 13 and over 19 per cent. For this year, QNS has set the target of VND8 trillion ($347.83 million) in revenue and VND913 billion ($39.7 million) in after-tax profit. Of these targets, QNS has reached 46 per cent of the revenue and 57 per cent of the profit targets.

The rally in global sugar price, both raw and whit esugar, has contributed a great deal to these positive results. The average price of while sugar was $449.1 per tonne in June, showing a slight retreat compared to May but still higher than the level in March and April. Six-month instant-delivery raw sugar price averaged 17.41 US cents per pound, which was higher than in previous months.

In the domestic market, apart from interconnectivity with the global market, sugar prices also benefits from domestic policies as the Ministry of Industry and Trade has applied anti-dumping and anti-subsidy tariff on sugar products of Thai origin and put restrictions on sugar imports.

According to Le Trung Thanh, deputy chairman of the Board of Management at LSS, the price of sugar products has jumped 20 per cent on-year.

However, Thanh said that in the short term, sugar producers like others were impacted by the fourth wave of COVID-19 which is plaguing localities across the country.

The producers are keeping a close eye on the pandemic situation, particularly in big cities like Ho Chi Minh City, Hanoi, Danang, and Binh Duong to craft suitable plans for the new fiscal year.

“Business growth would depend largely on the pandemic situation,” said Thanh, adding that the current social distancing policy in Hanoi and many other localities has impacted product delivery to supermarkets in affected areas.