Through a concerted commitment to efficiency and cost-effectiveness, the Fiji Sugar Corporation has prudently reduced its operating cost to an average of about $59 million from over $90 million in 2016, a substantial 34 per cent reduction.
FSC Chair Pradeep Lal while highlighting this during the annual general meeting of the corporation said they have diligently worked towards optimizing operations to attain a sustainable financial equilibrium.
He said together with these cost-effective measures, FSC has substantially lowered the breakeven point to a crop of 1.6 million metric tonnes, an improvement from the previous benchmark of 2.4 million metric tonnes.
“These achievements underline FSC’s dedication to embracing best practices and operating efficiently.”
Lal said over the last two decades, FSC has encountered financial challenges, with only a handful of years – approximately 4 to 5 – where the Corporation recorded net profits.
“It’s worth noting that among these profitable years, three were marked by the reversal of impairments, and in one instance, a Government grant of $50 million played a pivotal role.”
“Of the past 25 years, genuine profit was realised in just two years. Even during the peak production year when FSC harvested approximately 4 million tonnes of cane, the average profit margin stood at a modest $4 million despite the preferential price obtained from the European Union.”
Lal added the Corporation’s financial success is underlined by its impressive positive Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA), of $17.9 million for financial year 2023, is a turnaround from the negative $6.7 million recorded in the preceding year, an improvement of $24.6 million and FSC further envisages a record positive EBITDA of $31.6 million for coming financial year with a crop of only 1.66 million.
He further mentioned that FSC’s commitment to financial prudence also extends to a strategic focus on the core operations, complemented by a dedicated effort to divest non-core operations.
“In particular, the optimisation of the fleet including trucks, harvesters, and tractors to ensure operational efficiency and cost-effectiveness.”
“These combined endeavours signify FSC’s commitment to financial soundness, prudent fiscal management, and a positive trajectory towards long-term sustainability and success.”
