Sapphire Foods India (SAPPHIRE) Q4 19/20 earnings summary

Executive summary

• FY20 delivered 12% consolidated revenue growth to INR 1,340 crore and 51% EBITDA growth to INR 66 crore, excluding Ind AS 116; COVID-19 disrupted operations from March 2020.

• Despite growth, consolidated net loss widened to INR 15,924.59 lakh, including exceptional charges of INR 9,439.06 lakh, chiefly goodwill impairment and obsolete inventory.

Financial highlights

• Consolidated revenue from operations reached INR 134,041.20 lakh versus INR 119,382.24 lakh in FY19; total income was INR 135,173.59 lakh.

• Standalone revenue from operations rose 15% to INR 110,356.58 lakh; EBITDA before exceptional items and excluding Ind AS 116 was INR 4,663.73 lakh.

• Consolidated loss before exceptional items and tax was INR 6,659.14 lakh; exceptional items were INR 9,439.06 lakh and net loss was INR 15,924.59 lakh.

• Consolidated diluted EPS was negative INR 31.36 versus negative INR 9.82 in FY19.

Outlook and guidance

• Management expected recovery as pandemic concerns eased; the outlook emphasized adapting operations, improving cost efficiency and returning toward pre-COVID revenue levels.

• By September 2020, nearly 90% of stores were operating, primarily through takeaway and delivery; August sales in the wider business exceeded 50% of pre-COVID levels.

• Sales and store-development targets remained uncertain, with Yum development-agreement targets and timelines under review in light of COVID-19.