In FY24, The Thal Industries Corporation Limited (TICL) reported a net profit of PKR 1.14 billion (EPS: PKR 75.61), marking a 42% decline from the previous year’s net profit of PKR 1.97 billion (EPS: PKR 130.87). The decline was primarily due to higher financial costs and rising sugarcane prices. In FY24, TICL crushed 2.70 million metric tons of sugarcane, producing 260,000 metric tons of sugar with a recovery rate of 9.65%.
Despite higher crushing volumes, recovery rates declined due to pest and whitefly attacks in Layyah. Gross profit and net profit margins fell to 16.02% and 3.97%, respectively, due to rising financial costs. The revenue mix for FY24 was as follows: sugar contributed 81.60%, molasses 12.02%, electricity 4.75%, bagasse 1.42%, and press mud 0.20%. Overall, revenue declined by 7% YoY to PKR 28.61 billion (FY23: PKR 30.81 billion). Pakistan’s total sugar production in FY24 was 6.8 million tons, with a stock carryover of 0.7 million tons from FY23, bringing total availability to 7.5 million tons. Annual consumption stood at 6.2-6.3 million tons, resulting in a surplus of 1.3 million tons.
Due to this surplus, sugar prices remained under pressure, trading around PKR 115-120 per kg. The sugar industry urged the government to allow 1 million tons of exports, but only 150,000 tons were approved in June 2024. Additional quotas of 100,000 tons in September and 500,000 tons in October were later approved. As a result, the crushing season on November 21, 2024 started with a sugar carryover of 600,000-650,000 tons. Sugar procurement costs increased from PKR 416 per maund in FY24 to PKR 420 in the current year.
The ex-mill sugar price is PKR 140 per kg. The government banned sugar exports when prices hit this threshold. Total assets increased significantly to PKR 27.8 billion, mainly due to higher sugar stock carryover, as the expected production forecast of 6 million tons was surpassed by an actual yield of 6.8 million tons, leading to excess supply. TICL’s Layyah Sugar Mills has a bagasse-based power generation capacity of 45MW, with 20MW sold to Multan Electric Power Supply Company under an IPP agreement.
The Safina Sugar Plant generates 13MW, which is entirely used for internal consumption. Approximately 50% of the company’s total sugar production is sold to the corporate sector, including beverage and pharmaceutical companies, while the remaining 50% is sold to the unregistered sector. Looking ahead, TICL expects sugar production in FY25 to align with last year’s levels. Sugar production is projected at 6.2 million tons with 10% decline, with a carryover of 650,000 tons, bringing total availability to around 7 million tons.
Since the annual consumption is around 6.2-6.4 million tons, company does not foresee a significant surplus in FY25, with an expected excess of only 300,000-500,000 tons, which is considered nominal in the sugar industry. A clearer market picture is expected to emerge after February 2025.
Important Disclosures
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