Net revenue increased by 40%, and the yearly plan was completed by 100% in just the first three quarters of the fiscal year, with approximately one million tons of sugar consumed.
At the end of Q3 of the 2022-2023 fiscal year, Thanh Thanh Cong Bien Hoa Joint Stock Company (TTC AgriS, Hose: SBT) has sold approximately 996 thousand tons of sugar, an increase of over 30% compared to the same period last year. The accumulated net revenue reached 17.946 trillion dongs, a 40% increase compared to the same period last year, and the company achieved 100% of its annual plan. The sales volume of all channels recorded significant growth compared to the same period last year, with Export channels experiencing remarkable growth with a 91% increase in sales volume and B2B Industrial channels increasing by 22.5%. This is a positive sign that the demand for sugar consumption has significantly improved during the economic recovery phase.
The pre-tax profit in the first 9 months of the fiscal year reached nearly 585 billion dongs, completing 69% of the annual plan. The after-tax profit reached 533 billion dongs.
At the end of Q3, sugar still plays a leading role in the revenue structure, with sugar products recording 16.535 trillion dongs, accounting for 92.1% of total revenue, a nearly 40% increase compared to the same period last year. Besides sugar products, miscellaneous revenue reached 299 billion dongs, accounting for 1.7% and increasing by 6.2% compared to the same period last year. Electricity revenue reached 203 billion dongs, accounting for 1.1%, and increasing by 11.3% compared to the same period last year. Fertilizer revenue reached nearly 158 billion dongs, accounting for 1%, and increasing by 111% compared to the same period last year. Other revenue was also a highlight, with nearly 751 billion dong, accounting for 4.1% of total revenue, and increasing by 63.4% compared to the same period last year. This revenue came from the sales of heavy machinery and other agricultural products such as bananas, coconuts, and rubber. The shift in revenue structure demonstrates that SBT is on the right track toward a comprehensive agricultural value chain, becoming a leading multinational agricultural company in the region, operating and developing a seamless ecosystem of products and services, and maximizing profits.
Revenue structure by product type for the first 9 months of the fiscal year 2022-2023
Along with promising business results, SBT's scale has also been expanded with total assets as of March 31, 2023, reaching VND 29,716 billion (~$1.3 billion), up more than 7% compared to the beginning of the fiscal year. Despite market trends that remain volatile, SBT has proactively calculated appropriate business targets thanks to its good information management foundation, anticipating the impact of fluctuations and global economic crises. The company has continued to restructure its capital sources, increase assets, reduce debts, and particularly focus on the plan to raise 20% of its capital from professional investors.
On April 27, SBT announced a plan to solicit shareholder opinions in writing to approve the issuance of shares to pay dividends for the 2021-2022 and 2019-2020 fiscal years. Accordingly, SBT will issue more than 67.3 million shares to pay dividends, at a rate of 10%. The issuance value at par will be over VND 673 billion. The issuance is expected to take place before December 2023, and the source of funding will be the undistributed after-tax profits according to the audited financial statements for the fiscal year 2021-2022.
Teaming up with IFC and SMBC
In late April 2023, SBT officially established a strategic partnership with the International Finance Corporation (IFC) and Sumitomo Mitsui Banking Corporation (SMBC). IFC and SMBC will jointly participate in commercial funding, with a total amount of $40 million in working capital loans for SBT. The entire amount of funds raised by the company will be used to serve production and business activities, improve production capacity, and expand the market, in line with the company's development strategy and cooperation with professional investors.
IFC is known as one of the world's leading financial organizations in private investment and sustainable investment, with very stringent selection criteria. SMBC is a leading global financial institution and a core member of the Sumitomo Mitsui Financial Group. SMBC is one of Japan's largest banks with total assets of over JPY 238,700 billion (~$1.748 trillion) and also has a high credit rating on a globally integrated network spanning 39 countries and regions. The cooperation between IFC, SMBC, and TTC AgriS has demonstrated that TTC AgriS has fully met the comprehensive and strict approval standards of the two institutions.
The collaboration between IFC, SMBC, and TTC AgriS has demonstrated that TTC AgriS has fully met the rigorous approval standards of its two partners, from the corporate governance framework to sustainable development and good business strategy. As a leading multinational agricultural company in Vietnam, TTC AgriS has always been a pioneer in upgrading and standardizing its enterprise management system based on sustainable development, applying ESG standards to all management, production, and business activities, and strictly fulfilling its obligations to related parties while ensuring transparency of information.
Sugar prices spike to 11-year high amidst global supply scarcity concerns
According to data from trading economics, as of April 27, raw sugar prices rose to 26.9 cents/pound, the highest level since September 2011, hitting an 11-year peak. The spike in sugar prices is attributed to concerns over global supply scarcity, which threatens to maintain pressure on global food inflation.
Asia's sugarcane harvest season has ended and has witnessed significant production decreases in major producing countries, particularly India, Thailand, China, and Pakistan. The Indian Sugar Mills Association (ISMA) reported a 3.3% decline in sugar output from October 2022 to March compared to the same period last year, down to nearly 30 million tonnes. Overall, the country's sugar output for the crop year is estimated at 34 million tonnes, lower than the 36.5 million tonnes ISMA forecasted at the end of last year. ISMA also predicted India's sugar exports for the 2022-2023 crop year would only be around 6.1 million tonnes, down from the 9 million tonnes predicted in October last year. According to a report from the US Department of Agriculture, Brazil's sugarcane production for the 2022-2023 crop year is expected to reach only about 621 million tonnes, down 7.5% from the 2021-2022 crop year.
The price of sugar is reaching its highest level in over a decade.
According to experts, harsh weather conditions could further increase the price of sugar, as concerns arise about tight supply stemming from India's limited export prospects due to lower-than-expected production caused by adverse weather conditions, as well as limited supply from other countries (Pakistan, Thailand, etc.), while global consumption continues to rise steadily and stockpiles decrease. At the same time, there are concerns that the recent high oil prices could encourage Brazil and India to shift towards ethanol production. Despite some signs of a slowdown in the upward trend and increased short-term risks, indicating the possibility of a short-term adjustment cycle, many experts expect the medium and long-term trend of sugar prices to continue to grow and soon reach the level of 30 cents/lb, due to prolonged supply shortages in unfavorable weather conditions
