A significant shift has occurred within Victorias Milling Co., Inc., as recent financial reports reveal a substantial downturn in profitability. Attributable net income experienced a sharp decline of 56.23%, plummeting to P162.28 million for the three-month period ending in November.
This downturn contrasts sharply with the previous year’s performance, where the company reported a net income of P370.75 million. Despite an overall increase in revenue, rising operational costs proved to be a formidable challenge, ultimately eroding the company’s earnings.
Total revenue did see an encouraging rise, climbing 28.82% to reach P3.24 billion, a jump from the P2.51 billion recorded during the same period last year. This growth was largely fueled by a considerable surge in sales revenue.
Sales revenue itself experienced a robust increase of 61.34%, reaching P3.1 billion compared to P1.92 billion the previous year. However, revenue generated from services experienced a dramatic decrease, falling 76.43% to P139.69 million from P592.74 million.
Beyond core operations, other income sources – encompassing storage fees, interest, and investment returns – also saw a reduction, decreasing by 28.21% to P96.7 million. This decline further contributed to the overall financial pressure.
A key factor impacting the company’s bottom line was a substantial increase in the cost of sales and services, which rose by 40.06% to P2.93 billion. This surge was primarily driven by increased inventory usage.
Adding to the financial strain, the company was compelled to recognize a P222.14-million provision for inventory write-downs. This adjustment reflected the impact of declining market prices for both molasses and raw sugar, forcing a reevaluation of asset values.
Operating expenses also contributed to the challenges, increasing by 16.91% to P218.64 million. This rise encompassed both general administrative costs and selling expenses, indicating broader inflationary pressures within the business.
Reflecting these financial results, the company’s shares experienced a slight decrease in value on Thursday, closing at P2.12 apiece – a drop of 3 centavos, or 1.4%.
