Britannia Industries (BRITANNIA) Q4 06/07 earnings summary

Executive summary

• FY07 sales rose 27.5% to Rs 23,171 mn, but commodity inflation and higher growth-support costs compressed profitability; PAT fell 26% to Rs 1,076 mn.

• Bread, cake and rusk sales grew 54% to Rs 2,000 mn; exports rose 63% to Rs 187 mn.

Financial highlights

• Sales increased 27% to Rs 23,171 mn from Rs 18,179 mn; operating profit declined 45% to Rs 972 mn from Rs 1,762 mn.

• PBT before exceptional items was Rs 1,238 mn versus Rs 1,958 mn; reported PBT was Rs 1,184 mn versus Rs 2,007 mn.

• PAT was Rs 1,076 mn, down from Rs 1,464 mn; EPS after exceptional items was Rs 44.16 versus Rs 59.96.

• Consolidated sales were Rs 23,841 mn and PAT Rs 1,051 mn; consolidated EPS after exceptional items was Rs 43.09.

• Exceptional items netted to Rs 54 mn, including Rs 103 mn of VRS compensation and amortisation, offset by liability reversals and property-sale gains.

Outlook and guidance

• Market expansion and biscuit excise-duty exemption for products priced up to Rs 100/kg were expected to support growth; wheat, edible oil and dairy inflation remained a profitability strain.

• Growth strategy prioritised brands, geography and channels, with continued investment in innovation, market infrastructure, technology and supply-chain efficiency.

• Profitability plans emphasized operational efficiency, improved market execution and an economically advantaged supply chain.