Sapphire Foods India (SAPPHIRE) Q4 18/19 earnings summary

Executive summary

• FY19 sales grew 26.16%; EBITDA rose to Rs. 2,409 lakh from Rs. 19 lakh, while consolidated net loss widened to Rs. 4,465.70 lakh from Rs. 4,124.62 lakh.

• Operations spanned 350+ KFC, Pizza Hut and Taco Bell restaurants across India, Sri Lanka and Maldives; priorities included customer experience, delivery, digital activation and operational controls.

Financial highlights

• Consolidated revenue from contracts with customers was Rs. 119,382.24 lakh in FY19 versus Rs. 95,715.76 lakh in FY18; total income was Rs. 120,357.12 lakh versus Rs. 96,552.14 lakh.

• Consolidated expenses reached Rs. 124,712.82 lakh, resulting in a pretax loss of Rs. 4,355.70 lakh and net loss of Rs. 4,465.70 lakh.

• Standalone total income was Rs. 96,960.49 lakh and net loss was Rs. 4,205.08 lakh in FY19, versus Rs. 76,862.19 lakh and Rs. 3,591.13 lakh in FY18.

• Consolidated operating cash flow was Rs. 5,043.73 lakh; investing cash outflow was Rs. 33,512.45 lakh and financing cash inflow was Rs. 28,113.95 lakh.

Outlook and guidance

• Development agreement with Yum targeted at least 250 net new Pizza Hut stores over five years from Jan. 1, 2017; missing targets in the first two years could put exclusivity rights at risk from year three.

• From Jan. 1, 2019, an upfront US$500,000 deposit was due annually for years three through five; deposits are refundable upon meeting the applicable build targets.

• FY19 growth initiatives emphasized product innovation, affordability, delivery-channel performance and digital activation; no quantified financial outlook was stated.