Balrampur Chini Mills (BALRAMCHIN) Q4 05/06 earnings summary

Executive summary

• Record results for the 18 months ended 30 Sep 2006: turnover ₹1,989.77 cr, PBDIT ₹466.49 cr and PAT ₹291.59 cr; the extended period is not comparable with FY04-05’s 12 months.

• Expansion lifted installed crushing capacity by nearly 91% to 55,500 TCD, alongside greater integration in power and ethanol.

Financial highlights

• Turnover ₹1,989.77 cr vs ₹929.61 cr; PBDIT ₹466.49 cr vs ₹242.44 cr; PAT ₹291.59 cr vs ₹125.06 cr, for 18 months vs 12 months.

• PBT before exceptional items ₹364.89 cr; net profit ₹291.59 cr; basic and diluted EPS ₹12.19 for the 18-month period.

• Earlier-season cane price adjustment: ₹60.98 cr, of which ₹38.65 cr was charged to general reserves and ₹22.33 cr remained as an exceptional item.

• Interim dividend ₹2/share and recommended final dividend ₹1.50/share; total dividend ₹3.50/share for the 18-month period.

Outlook and guidance

• Domestic sugar production was estimated at 191 lakh tonnes in 2005-06 and forecast at 225 lakh tonnes for the next season; subdued prices expected short to medium term.

• Cane prices were expected to rise, pressuring margins; management called for the export ban to be lifted to support price stability.

• Ethanol blending at 5% and the revised UP price of ₹21.50/litre were expected to support distillery economics; power and alcohol were viewed as less cyclical earnings streams.

• Kumbhi was expected to commission by Mar 2007 and Gularia by Nov 2007; combined planned co-generation capacity 51 MW, with 31 MW exportable.