– accumulated deficit at $41B
GuySuCo’s dire financial situation was expressed in its 2015 annual report recently tabled in Parliament which cited an accumulated deficit of $41 billion at the end of the year and a loss of $1.9 billion which included the state subvention of $12 billion.
According to its Consolidated Statement, GuySuCo saw revenue of $21.4 billion for last year but the cost of its sales was $35 billion which left a gross loss of $13.6 billion. The gross loss in 2014 was $18.8 billion as a result of revenue of $23.1 billion and cost of sales of $41.9 billion.
Its operating loss for 2015 following its subvention was $902 million compared to $19.3 billion for 2014. Other expenses pushed the loss for 2015 to $1.9 billion compared to 2014.
The tabling of the report in parliament comes at a time when the government is preparing to make a major decision on the future of the sugar industry in light of its grim financial condition and a downswing in production. A Cabinet sub-committee is to make a decision by the end of the year and a range of options are under consideration.
In its audit report on the financial statements, accounting firm, Parmesar said that as of December 31, 2015 the company’s accumulated deficit was $41.4 billion.
“The validity of the going concern basis on which the consolidated financial statements are prepared depends on the continued support from the Government of Guyana. Should the Company be unable to continue in operational existence, adjustments would have to be made to bring the consolidated statement of financial position values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify non-current assets as current assets. Our opinion is not qualified in this respect”, the report said.
Total sugar production for 2015 was $231,071 tonnes, 7% above the mark in 2014. Production for 2016 is expected to fall significantly below the figure in 2015, the first full year that GuySuCo has been under new management installed by the APNU+AFC government.
The yield in 2015 was 57.93 tonnes of cane per hectare, a 4% increase from 2014. The factory recovery was 12.19 tonnes of cane per tonne of sugar, a 7% improvement over 2014.
The employment cost for GuySuCo dropped by 3% to $21.7 billion in 2015. This figure amounted to 101% of total revenues and 53% of total costs. Employment costs has been a major issue for the corporation over the last decade. No wage increase was paid for 2015 and the corporation recently announced that none would be paid for 2016.
Albion
In terms of production, the Albion estate was the star performer for 2015. The estate produced 59, 858 tonnes on its own. This was a whopping 27,000 tonnes more than the Skeldon estate at 32,213 tonnes with its US$110 million troubled, Chinese-built factory. Albion has been running on a decades-old factory. When production from private farmers was taken account of, Skeldon’s production figure went up to 39,157 tonnes and Albion’s to 60,390 tonnes. Minus the cane from private farmers, the Blairmont estate also produced more than the Skeldon estate. Blairmont registered 36,695 tonnes of sugar compared to Skeldon’s 32,213 tonnes.
The Blairmont estate had the best yield at 73.47 tonnes of cane per hectare. Albion was second at 68.85. Skeldon’s production for 2015 was the highest since the much-vaunted factory was commissioned in 2009.
Referring to the costly Skeldon Sugar Modernisation Project, the 2015 report said that the main focus last year was on improving throughput and reliability at Skeldon. Major modification was done to the punt dumper where the lifting mechanism was converted from hydraulic rams to cables and winch. The modification proved successful and the weekly average was as high as 260 tonnes per hour. At inception, the factory was meant to crush 350 tonnes of cane per hour and produce around 110,000 sugar each year.
