MUMBAI, 11 June 2020: Dwarikesh Sugar Industries Ltd has recorded a drop in net profit for the fiscal year 2019-20 at INR 73.45 crore, as compared to INR 95.11 crore posted in FY 2018-19.
However, during the FY 2018-19, the company’s total income was up to INR 1,341.53 crore, as compared to total income of INR 1,120.22 crore, the company said in a filing to Bombay Stock Exchange (BSE).
“Country expects to produce 27 million tons of sugar during SS 2019-20. Sugar price continues to be around the MSP level of INR 3100 per quintal. We continue our efforts towards improving operating efficiencies and control costs," the filing added.
Q4 results records growth in PAT
During the fourth quarter ended 31 March 2020, the company reported a total income of INR 463.21 crore and profit after tax of INR 44.27 crore vis-à-vis total income of INR 214.09 crore and profit after tax of INR 32.35 crore during Q4 FY 2019.
Sugar sold during Q4 FY 2020 was recorded at 12.28 lakhs quintals at an average realization of INR 2,905 per quintal vis-à-vis 5.17 lakh quintals at an average realization of INR 2,865 per quintal during Q4 FY 2019.
Increase in sugar sold is on account of higher monthly releases for domestic sales & export of 3.40 lakh quintals of raw sugar under MAEQ 2019-20 vis-à-vis 1.34 lakhs quintals of raw sugar exported during the corresponding quarter last year.
Sells 38.78 lakh quintals of sugar during FY 2020
Sugar sold during FY 2020 was at 38.78 lakh quintals at an average realization of INR 2,968 per quintal vis-à-vis 31.77 lakh quintals at an average realization of INR 2,963 per quintal during FY 2019.
Sugar stock as on 31 March, 2020 was 29.58 lakh quintals. The distillery capacity expansion project has been successfully completed and 100 KLPD distillery plant commenced commercial production on the 23 December, 2019.
During Q4 working of the plant was stabilized and the plant was optimally operational. Effective 1 April, 2019, UPERC, vide tariff order dated July 25, 2019, reduced the rates at which power is sold to Power Corporation.
Accordingly, the Company has accounted power sale at the reduced tariff notified by UPERC. Consequent to the same profit for the quarter and year ended 31 March 2020, is lower by INR 17.55 crore and INR 33.77 crore respectively. The tariff order is contested through UP Co-Gen Association in appropriate Court of law.
Outstanding long term loan at INR 231.19 crore
On 31 March, 2020, the Company had outstanding long term loan of INR 231.19 crore including SEFASU 2018 (funded by the State Government of Uttar Pradesh to clear sugar cane dues of SS 2017-18) loan of INR 114.31 crore. Balance amount of INR 116.88 crore is the loan availed for the distillery project.
Besides the above, the Company also had a soft loan of INR 140.98 crore under interest subvention scheme of the GOI. The soft loan was carved out of the working capital limits of the company. The loan is since repaid in full in April 2020.
ICRA maintains A+ ratings long term loan
All the outstanding long term loans are at concessional rate of interest. Long term rating accorded by ICRA is maintained at A+ with stable outlook and the short term rating accorded to the Company by ICRA for CP program of INR 300 crore is A1+
The Company also has outstanding preference shares of INR 15.00 crore due for redemption in FY 2020-21 SS 2019-20 was successfully consummated and the company crushed 374.17 lakh quintals of sugarcane and produced 45.89 lakh quintals of sugar @ recovery of 12.26 percent.
The said recovery is without considering the impact of diversion of B heavy molasses for making ethanol. Adjusted recovery is therefore higher.
In the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lock-downs of all economic activity.
With the assistance of the Government and the local administration DSIL was able to carry out crushing operations uninterruptedly.
Domestic demand of sugar is adversely impacted due to COVID-19 crisis
Domestic demand of sugar is adversely impacted due to COVID-19 crisis as there is decline in demand of sugar from industrial and non- industrial bulk consumers segment due to nationwide lock down.
As per initial estimates, the pandemic could impact the overall domestic sugar consumption more than 1 million ton and may cause pressure on the selling price of sugar.
However, the Company will continue to closely monitor any material changes in future economic conditions due to this pandemic.
Outbreak of COVID 19 and lockdown coupled with social distancing norms & need for higher standards of hygiene has resulted in increased awareness and extensive use of alcohol based sanitizers.
Responding to the Nation’s Clarion call, DSIL started production of hand sanitizers in April, 2020 with the objective of discharging its corporate social responsibility.
Dwarikesh Sugar Industries is a leading sugar producer. The company has three fully automated and highly efficient sugar mills, located in Uttar Pradesh’s sugarcane-rich belt of Bijnor and Bareilly districts. The company’s combined production capacity is 21,500 tonnes of sugarcane per day.