JDW Sugar Mills Limited achieved earnings per share (EPS) of PKR 225.2 in SY24, marking a substantial increase compared to PKR 37.1 in SY23. In 9MSY24, the company reported an EPS of PKR 144.9, a significant improvement from PKR 25.3 recorded during the same period last year (SPLY).
The company’s corporate farms contribute 7-10% of the group’s total annual sugarcane requirement. JDW has initiated the development of a distillery plant to produce ethanol. The facility, with a production capacity of 230,000 litres per day, is scheduled to become operational in the second quarter of the year.
Management expects a marginal improvement in sucrose recovery compared to the previous year. The sucrose recovery rate in the preceding year was recorded at 10.45%. Additionally, sugar prices are projected to remain favourable. The distillery plant was constructed at a cost of approximately PKR 12-13 billion, with an anticipated payback period of 4-5 years.
Management intends to export 96-97% of the ethanol production, with the remainder to be either utilized domestically or exported as needed. For the current year, JDW anticipates sugar production to adequately meet domestic demand, eliminating the likelihood of surplus. The government’s production target for this year is 6.6 million tons, while JDW projects production of approximately 6.2 million tons. The shortfall is expected to be offset by last year’s surplus.
To ensure farmers receive equitable compensation and are encouraged to sustain sugarcane cultivation, JDW is procuring sugarcane at PKR 400 per 40 kilograms. This marks a reduction from the previous year’s price of PKR 435 per 40 kilograms. The lower procurement cost is expected to positively impact profitability.
Important Disclosures
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