Balrampur Chini Mills (BALRAMCHIN) Q4 01/02 earnings summary

Executive summary

• FY02 PAT was Rs 47.34 cr versus Rs 47.82 cr in FY01, despite lower sales and flat sugar prices; lower interest costs and opening-stock costs supported results.

• Stronger farmer relationships drove record 2001-02 season cane crushing of over 410 lakh quintals, up 40% YoY; average recovery was about 10%, down 0.20 percentage points.

Financial highlights

• Sales and other income were Rs 551.06 cr versus Rs 616.85 cr; PBT rose to Rs 56.44 cr from Rs 52.32 cr, while PAT was Rs 47.34 cr versus Rs 47.82 cr.

• PBDIT was Rs 93.34 cr versus Rs 102.79 cr; interest and financial charges fell to Rs 16.91 cr from Rs 29.63 cr after high-cost debt prepayments and lower-cost borrowing.

• EPS was Rs 24.81 versus Rs 24.19; the recommended equity dividend was 85%, or Rs 8.50 per share.

• Net cash from operating activities was Rs 81.82 cr versus Rs 106.26 cr in FY01.

Outlook and guidance

• FY03 outlook was guardedly optimistic: domestic consumption was expected to rise, production to remain near the prior-year level, and lower opening stocks could improve sugar-price sentiment if consumption outpaced output and exports continued.

• A 40 KLPD ethanol facility was scheduled for commissioning in July 2002, with supplies to oil companies expected from August; the 19.55 MW bagasse co-generation plant was due by December 2002.

• The Rs 100 cr integrated Barabanki complex, planned with 4,000 TCD sugar capacity, 60 KLPD ethanol, 16 MW co-generation and bio-compost, was expected to start in December 2003.

• Flexibility to switch among industrial alcohol, rectified spirit, extra-neutral alcohol, potable alcohol and ethanol was expected to support higher-value product mix and reduce exposure to sugar cyclicality.