SL Agritech Corp. (SLAC) said its net income for fiscal year (FY) 2017-2018 may not reach P700 million, as sales of its hybrid rice seeds fell short of the company’s target.
“Definitely, we will be surpassing last year’s net income, but whether we can reach P700 million, we are not sure yet,” SLAC Chairman and CEO Henry Lim Bon Liong told reporters in a recent interview.
“We rely on the Department of Agriculture [DA] for support but because of budget constraints, [hitting P700 million] is unlikely to happen,” Lim added.
He said the company and the DA had initially targeted to plant SLAC hybrid rice seeds in 1 million hectares, but only around 600,000 hectares had been planted with the high-yielding rice variety.
Lim attributed this to cuts in the budget of the DA, which had earlier targeted to plant hybrid rice seeds in at least 1 million hectares to boost paddy production. The company slashed prices last year to encourage more farmers to plant SLAC hybrid rice seeds.
Because of this, Lim said SLAC’s net income in the current fiscal year ending May 31 would be less than its target of P700 million.
“From P500 million [in the previous fiscal year] to P700 million is a big jump, but definitely SLAC is still a profitable venture. We might earn more than P500 million for the current fiscal year,” Lim said.
SLAC’s net income in FY 2016-2017 grew by nearly 11 percent year-on-year to P509.225 million.
Lim also disclosed that the company will be issuing P2 billion worth of short-term commercial paper within the first quarter to fund the company’s expansion this year. “This will allow us to expand aggressively.”