August 25, 2015Roxas sets P600-M capex to boost mill efficiency
James Loyola (Manila Bulletin)| http://goo.gl/6JkVpG
Roxas Holdings, Inc. (RHI) is allotting P600 million for capital expenditures as it continues to take steps to further improve operational efficiency.
According to RHI chief operating officer Arcadio Lozada, the capex budget will be used to boost efficiency in the company’s sugar mills in Negros in the hope of capturing a bigger share of the market.
This comes after the company posted a 28 percent drop in net income for the first nine months of its fiscal year ending September to P329 million from the P455 million earned in the same period last fiscal year.
Consolidated revenues reached P6.5 billion, 3.17 percent higher from last year’s P6.3 billion.
A big portion of the drop is a result of the lower sugarcane harvest for the year due to the delayed rainfall last year affecting the quality of cane. The Sugar Regulatory Administration said total harvest this year was only at 2.33 million metric tons, 5 percent lower than the 2.46 million MT yield last year.
“It was compounded by farmers opting to send most of their harvest to other millers because they were able to recover more sugar from canes. But we’ve been improving our recovery rate since last year,” said Lozada.
He noted that the gap in yield between RHI millers and the competition has been narrowed to 6 percent from the prior 10 percent. “By next year we expect to erase it completely that’s why we’re spending P600 million,” said Lozada.
RHI operates a sugar milling facility in Negros Occidental via Central Azucarera de la Carlota plant and Hawaiian-Philippine Company, Inc. It also operates another one in Batangas via Central Azucarera Don Pedro, Inc.
“We hope to stabilize the cane supply situation across all our operations in Negros Occidental and Batangas through the programs we have started to roll out,” said RHI chairman Pedro E. Roxas.
RHI president Renato C. Valencia said the low cane supply also affected the Group’s EBITDA, which dropped 10 percent to P1.16 billion from the previous year’s P1.28 billion.
“Most of our subsidiaries performed positively in the third quarter and we are looking at further improving results by the fourth quarter,” he said.