EID Parry, a Murugappa group company, saw losses in its sugar business extend to 1.63 billion rupees in the quarter ended June, compared to a loss of 132 million rupees in the same period l ‘last year, due to falling sugar prices due to higher production.
At the consolidated level, the operating loss on sugar operations was around Rs 1.8 billion, against Rs 220 million during the same quarter of last year, according to the company. However, the nutraceutical business, which the company has developed in order to cope with the risks of the sugar business, has seen multiple growth in terms of profits and around 10 percent in terms of segment sales. .
“The performance of the company in the first quarter of 2018-19 was largely affected due to the drop in sugar prices due to the higher sugar production in the country compared to the previous sugar year. The price of sugar has fallen below the cost of production due to a shift in the position of sugar supply and demand, ”said S Suresh, general manager of the company, in a statement.
The Indian government has supported the taking of the necessary measures such as the monthly release order mechanism and the specification of the minimum support price for sugar at 29 rupees / kg from June in order to maintain the price stability of the country. sugar. However, the small amount of monthly introductory orders impacted the company’s sales, profitability and cash flow.
The export quota and the related government subsidy on sugar factories does not benefit the company due to lower international sugar prices compared to the domestic market and also lower government incentives, Suresh added.
At the same time, the nutraceutical division posted earnings before interest and taxes of Rs 44.1 million, against Rs 11.1 million during the same quarter of the previous year. While the nutrients and allied products sector, crop protection and distillery also showed growth in their net profit, cogeneration saw loss before tax and interest increase to Rs 212.8 million, from a loss. of Rs 125.8 million in the corresponding quarter of last year. .
The net loss for the quarter ended June 30, 2018 was around Rs 1.5 billion compared to a profit of Rs 203 million during the same period of the previous year. Total income fell to Rs 33.70 billion, against Rs 33.95 billion during the same period of the previous year.