LAHORE (Syed Ali Ijaz) - SHAHTAJ Sugar Mills Limited was incorporated in Pakistan as a public limited company on 27th March 1965. It’s listed on both Karachi and Lahore Stock Exchanges. The company produces sugar and its by-product from sugarcane for revenue generation. The cycle begins every year in Nov-Dec till Mar/Apr. Therefore, most of the expenses/ production occurs in the first half of the year.

The sugar production was 92,441 metric ton and 47,484 metric ton molasses in the year 2012. The sugar production increased by 23pc from the year 2007 to 2012 while the production of molasses increased by 7.41pc from 2007 to 2012. The sales increased from Rs 2165,250 (2007) to Rs 5119,499 (2012). The net profit was Rs 210,465,000 in 2012 and Rs 358,747,000 in 2011. The average share price in 2012 varied from Rs 95.23 (high) to Rs 60.10 (Low). During this tenure, the company also had a considerate dividend yield of Rs 8.54.

Shahtaj Sugar Mill like its competitors in the industry is affected by the energy outages, rising inflation and other macroeconomic problems. The new financial budget for the fiscal year of 2013-14 announces an increase of GST to 17pc. This rising cost of production will eventually result in an increase in price level, hence affecting the end consumers. However, the senior board of management predicts better performance in the coming years with its future growth plans.  

As the former PPP government had not come with any long-term solution for the energy crisis, it is speculated that the new government will be an advocate of sugar sector. The newly-elected Prime Minister Nawaz Sharif strongly encouraged the business sector. This is a good prospect for the businesses in Pakistan.

(The analysis prepared from annual reports of Shahtaj Sugar Mills)