Radico Khaitan (RADICO) Q4 05/06 earnings summary

Executive summary

• FY06 marked record growth: sales including arrangements with other distilleries and bottling units reached Rs 11,353.98 million, up 17% YoY; profit after tax rose 26% to Rs 451.66 million.

• Expansion combined new brand launches, acquisitions, higher production capacity and entry into overseas markets; IMFL sales reached 12 million cases.

Financial highlights

• Sales including arrangements were Rs 11,353.98 million vs Rs 9,735.91 million in FY05; own operations contributed Rs 7,674.44 million and arrangements Rs 3,679.54 million.

• Profit before tax was Rs 523.26 million vs Rs 385.06 million; profit after tax was Rs 451.66 million vs Rs 358.56 million.

• PBDIT was Rs 873.37 million vs Rs 634.91 million, up 38% YoY; EBITDA margin rose to 12.8% from 10.5%.

• Capital projects totaled Rs 1,223 million, including a 27 million-litre-per-year grain distillery and brand acquisitions.

Outlook and guidance

• Growth priorities: extend the 8 PM brand, develop new brands and production facilities, acquire brands and bottling or distillery units, improve efficiencies and expand spirit capacity.

• Plans included new export markets, products tailored to local consumers, possible overseas bottling units, and continued technology upgrades and modernization.

• Proposed public offer or private placement of GDRs, ADRs and/or FCCBs to raise up to US$100 million for growth projects, overseas investments and partial repayment of high-cost debt.