The Fiji Sugar Corporation Limited (FSC) has announced notable gains in both revenue and profitability, despite encountering significant challenges.
While cane production experienced a 15 percent decline largely due to unfavorable weather, FSC reported a 12 percent rise in sales revenue along with a 10 percent increase in its share of proceeds. This positive outcome, detailed in the financial results for the year ending May 31, 2024, was supported by improved operational efficiencies, strict cost-control strategies, and innovative approaches.
Nitya Reddy, Chair of the FSC Board, emphasized the resilience of the Corporation in overcoming substantial challenges while pointing to a legacy of neglect and mismanagement that has plagued operations for decades.
Reddy remarked, “The industry at large, and FSC specifically, has faced some of the gravest issues in its 150-year history, deeply rooted in two decades of poor management and oversight. The Corporation is currently grappling with an unprecedented existential crisis.”
He noted a series of performance metrics have suffered drastically, with unsustainably low cane production, diminishing sugar output and revenue, debilitating inefficiencies, and deteriorating mill infrastructure exacerbating the crisis.
“This is a pivotal moment not only for our past but also for our future. We are channeling all our efforts and resources to restore confidence within the industry, which poses a significant challenge,” Reddy stated.
He also pointed out that the current state of the mills is a consequence of years of systemic neglect, insufficient maintenance, and misguided investments, calling for patience from those expecting quick fixes.
FSC is committed to restoring manufacturing efficiencies, with initiatives aimed at enhancing cane production, improving transport and harvesting logistics, and addressing issues related to burnt cane and the use of non-approved cane varieties. Reddy proposed transitioning to a more equitable payment system based on sugar quality rather than weight.
“Structural reforms are essential, and we can no longer afford to be in denial about this. Every sector of the industry must take accountability for their efficiency and outcomes instead of solely relying on FSC,” he added.
The Corporation’s revenue surged by 12 percent to $235.2 million, indicating a marked improvement in financial performance driven by increased sales and higher prices. FSC recorded its best revenue returns in 18 years, underscoring the sugar industry’s significance to Fiji’s economy.
Key financial highlights include:
– The Corporation’s share of proceeds rose to $71.15 million from $64.25 million the previous year.
– Trading profit reached $13.13 million, compared to $7.45 million in the prior year.
– Profit from operations was $2.51 million, contrasting a loss of $4.98 million the year before.
– EBITDA stood at $24.97 million, up from $17.87 million.
– Operating loss improved to $4.24 million from $23.0 million.
– Investments in Property Plant and Equipment totaled $10.05 million, up from $6.94 million.
Reddy expressed confidence that with ongoing support from stakeholders, FSC could cultivate a more resilient and sustainable future for Fiji’s sugar industry. He reiterated the Corporation’s commitment to its strategic priorities of restructuring, revitalizing crop production, enhancing mill operations, and optimizing revenue.
In addition to financial success, FSC is focused on sustainability and community engagement, advocating for environmentally responsible practices and supporting growers to ensure the enduring viability of the sugar sector.
“We are acutely aware of the challenges ahead, but we are committed to navigating them. By pursuing new market opportunities and strengthening our partnerships, we aim to secure long-term success for FSC,” he concluded.