Balrampur Chini Mills (BALRAMCHIN) Q4 03/04 earnings summary

Executive summary

• FY03-04 delivered record results: turnover Rs 853.85 cr, PBDIT Rs 129.40 cr and post-tax profit Rs 60.49 cr, supported by higher operating volume, lower production costs and byproduct income.

• Integrated sugar, alcohol and power operations generated about 40% of bottom-line profit; Haidergarh began operations ahead of schedule and Babhnan’s 60 KLPD distillery was commissioned.

Financial highlights

• Gross turnover rose to Rs 853.85 cr from Rs 667.58 cr; PBDIT increased to Rs 129.40 cr from Rs 72.72 cr, and net profit to Rs 60.49 cr from Rs 29.51 cr.

• EPS was Rs 31.88 versus Rs 15.55; proposed dividend was Rs 10 per share, or 100% of face value.

• Sugar prices were flat on a full-year average YoY, but recovered in Q4; 39% of FY03-04 post-tax profit was earned in the final quarter.

Outlook and guidance

• Cane availability is expected to increase in FY04-05 following wider planting in command areas; higher output at Haidergarh is expected as supplies improve.

• Sugar prices were expected to remain firm in FY04-05 after inventory reduction; integrated operations were seen supporting a favorable industry outlook over coming years.

• Haidergarh plans include a refinery, biocompost plant and distillery, plus targeted capacity increases to 10,000 TCD sugar and 50 MW power exports.

• Management anticipated an industry rebound over the next 3–4 years, supported by domestic consumption growth of 3–4% annually and the integrated business model.