Shree Renuka Sugars (RENUKA) Q4 02/03 earnings summary

Executive summary

• FY ended 30 Sep 2003 delivered the strongest operational and financial performance since inception, despite sugar prices reaching an eight-year low and domestic stocks rising to an all-time high equivalent to eight months’ consumption.

• Flexible pricing and timely exports helped reduce inventory before the sharp fall in sugar prices; integrated operations and co-products diversified revenue.

Financial highlights

• Gross revenue was Rs 31,622.33 lakh vs Rs 15,261.11 lakh; net profit was Rs 411.47 lakh vs Rs 236.24 lakh.

• Profit before financial expenses and depreciation was Rs 2,266.06 lakh vs Rs 1,588.54 lakh; interest expense was Rs 1,205.71 lakh vs Rs 823.08 lakh.

• Cash profit was Rs 1,077 lakh vs Rs 765 lakh; non-sugar revenue from power, alcohol and bio-fertilizer was Rs 4,320 lakh vs Rs 2,140 lakh.

• Sugar exports were valued at Rs 15,309.72 lakh; separate turnover notes record traded sugar sales of Rs 15,378.23 lakh.

Outlook and guidance

• Ethanol supply orders worth Rs 380 million were secured for FY 2003-04 with petroleum marketing companies.

• Management expected further industry consolidation and rationalization, and expressed confidence in delivering improved results in coming years.

• A full-scale reverse-osmosis plant for distillery effluent was expected to be commissioned by March 2004, following pilot trials indicating 50% effluent reduction and 50% reusable water.