Lanka Sugar stuns with sweet Rs. 1 b turnaround

Tuesday, 6 December 2016 00:50 - - {{hitsCtrl.values.hits}}

‘A state-owned biz success!’ - Bathiudeen
Lanka Sugar harvests 561067 MT of cane in 2016, up 7.6%
Reports Rs. 1 b profit for 2016, against Rs. 1 b loss of 2015
‘Sugar pricing formula next’ - Bathiudeen
Bathiudeen says formula is to make sugar sector more competitive

State-owned entity Lanka Sugar, which previously reported heavy losses, has now produced a strong financial performance as a result of the initiatives of the Minister of Industry and Commerce.

“I am pleased to inform the House that for the first time, Lanka Sugar Company Ltd, under my Ministry, earned a Rs. 1 billion profit,” stated Minister of Industry and Commerce Rishad Bathiudeen.

Industry and Commerce Minister Rishad Bathiudeen

Minister Bathiudeen was tabling his Committee Stage (budget) speech on the evening of 2 December. The speech summarised the performance of various institutions under the Industry and Commerce Ministry. “The profits came this year and it’s even more important to inform you that last year the company made a Rs. 1 billion loss,” said Minister Bathiudeen.

“As a result of the latest profits, I believe that this is a great success story among state-owned business enterprises. I praise the Honourable Finance Minister’s proposals for sugar industry development in this Budget such as imposing a minimum price of Rs. 5,000 per metric tonne for sugarcane with effect from 1 January 2017, calling local and foreign investors to invest in sugar mills in the Moneragala, Batticaloa, Kilinochchi and Ampara districts with a minimum plant size of 2,000 tonnes, etc. Lanka Sugar reported a profit of Rs. 1 billion by the third quarter of 2016 in comparison to the loss of Rs. 1 billion in 2015. It plans to establish a sugarcane juice extractor factory and a 2,000 hectare sugarcane plantation in the Vavuniya district’s Settikulam Division. The company also intends to produce a sugar pricing formula based on incentive to be competitive with any commercial crop in Sri Lanka.”

Up to the third quarter (3Q) of 2016, Lanka Sugar’s Pelwatte and Sevanagala facilities cultivated 13,164 hectares of sugarcane (an increase of 7.6% compared to the whole of 2015), harvesting 561,067 MT of cane resulting in an output of 44,059 MT of sugar (an increase of 2.5% from Y2015). According to the company’s financials, the company reported a net loss before tax of Rs. 1,030 million in FY 2015 but reported a stunning turnaround net profit before tax of Rs. 1,018 million as of the third quarter of FY 2016.