Noon Sugar Mills was incorporated in 1964 as a public limited Company, with its shares listed on the Pakistan Stock Exchange (PSX). Primary business of the Company involves the manufacture and sale of white refined sugar along with spirits.

The Company commenced commercial operations in 1966 with a daily crushing capacity of 1,500MT of sugarcane per day. The Company upgraded its capacity twice since conception. The first came in 2002, which brought crushing capacity to 4,000 TCD and the second was in 2007, increasing it to 10,000 TCD. The same levels are maintained today. Additionally, the Company installed its distillery plant in 1986 with the capacity to produce 50,000 liters per day. Since then, the Company has enhanced production capacity, which currently stands at 130,000 liters per day, accounting for the recent expansion of 50,000 liters made during MY19.

Noon Sugar Mills has its registered office located on Sarwar Road, Cantt, whereas, the mills are located in Sargodha. The Company has two reportable segments, namely, sugar and distillery. Additionally, the Company also operates a power plant with a rated capacity of 4MW. Power is used for production and any surplus is sold to FESCO (Faisalabad Electric Supply Company). During MY24, total cane crushed amounted to 712,164 metric tons, compared to 807,367 metric tons in MY23. Sugar production for MY24 stood at 73,597 metric tons, slightly lower than 75,717 metric tons in MY23. Sucrose recovery improved to 10.30% in MY24, up from 9.37% in the previous year. Additionally, ethanol production during MY24 totaled 13,429 metric tons, compared to 18,334 metric tons in MY23.

Majority of the shareholding lies with the Noon family, who holds a 71% stake in the Company. The family holds ~36.33% directly through Ms. Tahia Noon, 23.66% through Mr. Adnan and 11.25% through  Mr. Taimur Hayat Noon. Whereas, ~5% is held indirectly through Noon Industries limited, an associated Company. Remaining shareholding is split between financial institutions and the general public.

The Company's ownership structure is expected to remain stable, with no major changes anticipated in the foreseeable future. As part of a long-term succession plan, the sponsors are actively involving the next generation in the business to ensure continuity and sustained growth.

The Company is a part of Noon Group which comprises a total of four companies. With the exception of Noon Sugar Mills, other group companies are involved trading services, with no significant asset base. The group previously used to own and operate Noon Pakistan, most famous for its brand ‘nurpur’. However, major shareholding of the Company was sold off to Fauji Foundation Limited (FFL). The main sponsors now only holds an 11% stake in FFL, whereas, Fauji Foods operates the brand ‘nurpur’

With the exception of Noon Sugar Mills, majority of the companies are involved in trading which provide indenting services relating to the textile industry. Noon Sugar Mills is seen as the main Company in the group since other companies do not generate sufficient revenues and have an insignificant asset base.

The Company’s Board of Directors consists of seven members, including, the Chairman, two executive directors, two non-executive directors and two independent directors.

Mr. K. Iqbal Talib, Chairman of the Board, has over 50 years of technical and management experience in the sugar industry. He was previously the Chief Operating Officer and holds a Master’s degree in Chemistry from Aligarh Muslim University. In addition to being the Chairman of the Board, Mr. Talib was previously the President of Pakistan Society of Sugar Technologists and Chairman of Pakistan Ethanol Manufactures Association. Further, he is part of the Board in other group companies.

The Company has three Board committees in place, namely, Human Resources and Remuneration Committee, Technical Committee and Audit Committee. All committees must comprise at least three members of the board. Meetings are called when deemed fit, however, the Audit Committee must meet at least once each quarter.

Noon Sugar Mills external auditors, Shinewing Hameed Chaudri Company, Chartered Accountants, have expressed an unqualified opinion on the Financial Statements of the Company ending in September, 2024. The firm has been QCR rated by ICAP and are in Category 'B' of SBP panel

Noon Sugar Mills has a well-defined organizational structure that has various layers of management. All department heads are reportable to General Manager Operations, who along with the Chief Executive Officer, Manager Tax and Commercial Manager are Reportable to the Chief Operating Officer. Subsequently, highest level of authority lies with the Chief Executive.

The management team of Noon Sugar Mills comprises seasoned professionals with diverse expertise across various domains. The Chief Executive Officer, Lt. Col. (R) Abdul Khaliq Khan, brings 25 years of military experience, encompassing operations, administration, human resource management, and strategic assessment. His leadership acumen has been further enhanced through participation in various executive seminars and professional development courses. Supporting him in key operational and financial functions are Mr. Syed Adeel Ahmed, Chief Operating Officer, and Mr. Rizwan Sohail, Chief Financial Officer, who contribute their extensive industry knowledge and expertise to the organization's strategic and operational decision-making processes.

The absence of formal management committees within the Company indicates a gap in structured decision-making and internal governance mechanisms. This lack of dedicated committees for key operational areas may hinder the efficiency of strategic execution, risk management, and cross-functional coordination, potentially impacting overall management effectiveness. Implementing well-defined management committees could enhance accountability, streamline operational oversight, and improve strategic alignment with corporate objectives.

The management has implemented an Enterprise Resource Planning (ERP) system, facilitating the integration of core business functions, including cane accounting, general ledger management, and human resource operations. This system enhances data centralization, process automation, and real-time reporting, thereby improving operational efficiency, financial control, and decision-making capabilities across the organization.

The Company has established an internal audit department to enhance financial oversight and compliance. All disbursements require prior approval from the internal audit function, ensuring robust internal controls. Departments are mandated to submit requisition forms, which must be reviewed and authorized by the internal audit department before processing. The Chief Financial Officer (CFO) and Chief Operating Officer (COO) jointly serve as the Company's authorized signatories, reinforcing financial governance. Furthermore, the Company utilizes internally developed modules for monitoring operational performance. However, opportunities remain for further enhancement, as there is a need to strengthen and refine the existing control framework to optimize risk management and operational efficiency.

Pakistan’s sugar industry stands as the second-largest agro-based sector in the country, comprising approximately 91 mills with an annual crushing capacity of 80-90 million MT. Despite its scale, the industry faces persistent challenges, particularly due to the Government-regulated sugarcane support prices, which are set based on farmers’ costs and often constrain millers' profitability. In MY24, sugar production was recorded by, 6.7million MT, primarily due to the lower procurement of sugarcane resulting from increased cost and reduced recovery rate. To manage the surplus inventory, the Government permitted the export of 0.5 million MT of sugar, offering some relief to the industry. Despite these setbacks, sugar production is estimated to recover slightly to around 7 million MT. The Government’s continued support for exports is expected to provide a much-needed boost to millers, helping them navigate challenging industry dynamics and mitigate financial pressures.

Noon Sugar contributed ~ 1.1% in the overall sugar production of the country making it one of the leading sugar mills in Punjab region

During MY24, revenue of the Company increased and stood at PKR 11bln (M23: PKR 9bln) posted a growth of 22%. The Company majorly derives its revenue from sugar (81%) and the ethanol segment (19%). During MY24, the sugar segment’s revenue increased and stood at PKR 11bln (MY23: PKR 6bln). However, the sales of ethanol decreased and stood at PKR 2bln (MY23: PKR 4bln) due to a decrease in the global ethanol prices

The Company's financial performance in MY24 exhibited a marked decline compared to MY23, primarily driven by escalating sugarcane costs and heightened finance expenses. While gross profit margins registered a reduction from 20% to 10% due to the increased cost of raw materials, operational efficiency also suffered, evidenced by a decrease in operating profit margins from 14% to 4.7%. Critically, the compounding effect of these factors, coupled with a substantial rise in finance costs, precipitated a shift from a 4.5% net profit margin in MY23 to a net loss of 5.5% in MY24. This transition underscores the Company's vulnerability to input cost volatility and the significant impact of elevated finance charges on overall profitability, necessitating a strategic review of cost management and financial leveraging to restore sustainable financial performance.

The Company stands to benefit from the combination of high sugar prices in the global market and strong demand for ethanol in the export market. Nonetheless, the Company is vulnerable to fluctuations and consequent difficulties in the sugar industry, such as low prices for domestic sugar.

Noon Sugar Mills faces an inherent stress in its working capital due to seasonality in crushing cycle. The Company manages its working capital by taking advance payments from their customers, which it uses during the crushing season to purchase sugarcane stock. Any short fall is financed through short-term borrowings, which make up a major portion part of the Company’s balance sheet. In MY24, the Company's working capital cycle demonstrated a notable lengthening compared to MY23. Inventory management efficiency declined, as evidenced by an increase in average inventory days from 74 to 93, indicating slower inventory turnover. While trade receivable days slightly extended from 10 to 13, suggesting a marginal delay in collections, the overall gross working capital days expanded significantly from 84 to 106. Concurrently, trade payable days also increased from 40 to 46, reflecting a longer payment cycle to suppliers. Consequently, net working capital days deteriorated from 44 to 60, signaling a less efficient deployment of working capital and potentially impacting the Company's liquidity and operational flexibility.

The Company's financial health deteriorated in MY24, as evidenced by a substantial reduction in free cash flow from PKR 1.3 billion to PKR 588 million, coupled with a significant surge in finance costs from PKR 703 million to PKR 1.8 billion. Consequently, the debt service coverage ratio plummeted from 1.9x in MY23 to a concerning 0.5x in MY24, indicating a severely diminished capacity to service debt obligations and raising serious concerns regarding the Company's financial stability and future solvency.

Noon Sugar Mills experienced a significant escalation in its financial leverage during MY24, with the debt-to-equity ratio rising to approximately 79% from 47% in MY23. This substantial increase in debt, primarily composed of short-term borrowings constituting 95% of the total, was employed to address working capital demands. The Company's total borrowings surged from PKR 1.8 billion in MY23 to PKR 5.3 billion in MY24, indicating a notable intensification of financial risk and heightened vulnerability to liquidity pressures, given the preponderance of short-term debt obligations.