Shree Renuka Sugars (RENUKA) Q4 04/05 earnings summary

Executive summary

• FY ended Sep. 30, 2005 delivered strong growth: standalone total income ₹6,415.46m, PBT ₹490.16m and profit after tax before prior-period items ₹407.33m.

• Expansion through leased capacity and refining drove a stated 140% increase in sugar production despite prolonged drought and raw-material constraints.

• Consolidated total income was ₹7,978.01m and net profit ₹561.04m; shares listed on BSE and NSE on Oct. 31, 2005 after an IPO.

Financial highlights

• Standalone total income rose to ₹6,415.46m from ₹2,274.62m; PBT was ₹490.16m vs ₹151.74m, and PAT before prior-period items was ₹407.33m vs ₹122.71m.

• Standalone net profit after prior-period items was ₹334.62m; EPS was ₹23.79, calculated on earnings attributable to equity shareholders of ₹407.21m.

• Consolidated total income ₹7,978.01m, EBITDA ₹872.39m, PBT ₹643.87m, net profit ₹561.04m and EPS ₹32.76.

• Recommended dividend of ₹2 per ₹10 equity share, aggregating ₹47.72m before dividend tax; prior-year dividend was 10%.

Outlook and guidance

• Domestic sugar prices expected to remain supported as demand was forecast to exceed production for a third consecutive sugar year; opening stock-to-consumption ratio was 22%, the decade’s low.

• Larger planted area and favorable monsoons were expected to improve cane supply, extend the crushing season and lift recoveries.

• European reform deadline of May 22, 2006 was expected to reduce annual exports from ~6m tonnes to ~1.2m tonnes, supporting global and domestic sugar prices.

• Ethanol supply bids by oil marketing companies were expected to bring blended petrol to retail outlets in nine states.