Sakthi Sugars reported its quarterly results for the quarter ending December 2016. Tamil Nadu based sugar manufacturing posted a disappointing quarter with its loss widening to approximately Rs 37 crore vis-Ã -vis Rs 20 crore vis-Ã -vis the same quarter last year.
Sakthi Sugars reported its quarterly results for the quarter ending December 2016. Tamil Nadu based sugar manufacturing posted a disappointing quarter with its loss widening to approximately Rs 37 crore vis-à-vis Rs 20 crore vis-à-vis the same quarter last year.
Speaking to CNBC-TV18, M Manickam, Executive Vice Chairman said factors like interest rebate in the previous year combined with reduced operations lead to widening of the losses.
According to Manickam the company may experience a difficult 2017 as southern parts of India are experiencing drought like situation and getting cane out of fields is becoming increasingly difficult. He, however, expects a good March quarter.
He said performance of the company will depend on prices of sugar in the market along with the volume which will be processed by the company going forward. He said the company follows a no inventory policy and sells as it produces.
Speaking about debt, Manickam said though the finance cost of the company has reduced to Rs 750 crore, it will remain stable for this year owing to low crushing levels. However, he looks forward to bringing them down next year onwards.
Below is the verbatim transcript of M Manickam's interview to Sumaira Abidi and Nigel D'Souza on CNBC-TV18.
Nigel: The last quarter the average selling price was Rs 35-34, is it at the same price currently and also what is the cost of inventory you are sitting on and what inventory are you sitting on?
A: We don’t have too much of inventory. Most of the other companies have had inventory and we actually have a policy of not having inventory at all. So, we don’t have any inventory, we produce and sell as we produce.
Sumaira: This soya products business of yours -- if I am not mistaken -- continues to remain margin dilutive, what is the plan on that front?
A: This year we are going to have a tough time because of the drought in the south. We probably are having the worst rainfall in the last 140 years. So this is going to be a tough year to look at but for March our performance should be okay. Looking forward we will have to see what kind of rainfall comes, for us to really look forward.
Nigel: Your finance cost on a sequential basis is down by about 10 percent. In the past you have been telling us that you will be focusing on reducing debt, can you tell us what exactly is the current debt in your books, what did you start the year with and in the next one year what will your debt book look like?
A: We have about Rs 750 crore of debt as of now. We started with some Rs 120 crore higher. We have been able to bring it down and some repayments are going on. Next year we think that will be flat because the crushing levels are going to be lower. So, we probably will be maintaining the same debt and probably the year after is when we will start reducing it.
For full interview, watch video...
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First Published on Feb 10, 2017 02:52 pm