Higher expenses slash Bogo Medellin Milling’s profits
The Cebu-based listed sugar miller, Bogo-Medellin Milling Co. Inc., reported a 35-percent fall in net income to P3 million for the quarter ending March 31, 2016 as the hike in administrative expenses ate up part of its profits.
In a disclosure to the stock exchange, Bogo-Medellin Milling reported flat growth in sales at P136.9 million from P136.3 million in the same period last year while cutting cost of sales by 10 percent to P99.2 million from P110.8 million.
Sugar is Bogo-Medellin Milling’s main product. It produces, buys, refines, imports, and exports sugar, sugar cane, sugar beets, molasses, syrups and other related products.
The company’s raw sugar sales dropped to P121.2 million from P127.2 million but sales of molasses jumped to P15.6 million from P9.2 million.
Local demand for molasses has increased in the past few years, owing in part to the passage of the Biofuels Act that requires adding ethanol to gasoline used as fuel in cars. Ethanol is derived from molasses.
Molasses is also used in the production of liquor. For Bogo-Medellin Milling, molasses is just a sugar by-product with no assigned cost and income from it is only recognized when it is sold.
Its general and administrative expenses, however, grew by more than 50 percent to P38.3 million from P23.2 million. (By: Eileen A. Mencias)