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Sugar Profits Down 37 Per Cent

10 March 2011

AUSTRALIA - Despite a 37 per cent decline in profit last year, Maryborough Sugar Factory chief executive Mike Barry says 2010's figures are not as bad as they appear. writes that a one-off dividend following the sale of the Brisbane Bulk Sugar Terminal in 2009 accounted for much of the decline, with net profits falling from $6.79 million for the six months to December 31 from $10.83 million a year earlier, according to Barry.

Other factors that contributed to the decline in profits included higher expenses due to merger and acquisition-related fees and higher finance costs.

"The business isn't falling apart by any means," Barry said.

He said maintaining a globally competitive business would be the company's objective for the next 12 months.

"This outcome reflects the strong underlying performance of the company," Barry said.

"Despite the difficult weather conditions that the Australian sugar industry faced in season 2010, we were still able to produce a very pleasing result."

Mr Barry said the strong demand for raw sugar would result in higher prices for the product, which in turn would offset some of the expected lower crop levels this season.

The recent decision to shut down the 97-year-old Babinda Mill in north Queensland was an "example of our focus to drive down our cost structure to ensure we remain competitive," Barry said.

"We regret having to take this decision but it will allow us to further invest our remaining assets to ensure they remain sustainable," he said.

The 2010 results reflected a difficult harvesting season in the Mulgrave district and a very difficult season in the Maryborough region.

The crop in the Maryborough region was adversely affected by harsh weather conditions, which resulted in 16% less cane being crushed.

Overall cane processed decreased by 4% and sugar production decreased by 17 per cent because of lower overall sugar yields.

TheCropSite News Desk

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