Shree Renuka Sugars (RENUKA) Q4 06/07 earnings summary

Executive summary

• FY07 standalone revenue fell 8% YoY to Rs. 7,439m and net profit fell 3% to Rs. 544m; EBITDA margin remained 15% despite sugar-market turbulence.

• Consolidated total income declined 13% to Rs. 9,635m, EBITDA was Rs. 1,449m and PAT fell 31% to Rs. 830m.

Financial highlights

• Standalone PBT rose 5% YoY to Rs. 780m; reported net profit was Rs. 544m versus Rs. 563m in FY06.

• Consolidated PBT was Rs. 1,066m versus Rs. 1,388m; consolidated EPS fell to Rs. 33.01 from Rs. 51.34.

• Standalone interest expense declined to Rs. 133m from Rs. 188m, while depreciation rose to Rs. 249m from Rs. 88m.

Outlook and guidance

• Ethanol capacity targeted to rise 15x from 60 KLPD in FY06 to 900 KLPD by March 2009; expanded capacity, including the acquired distillery, was projected at 330m litres annually.

• Government blending mandates called for 5% ethanol from Oct 2007 and 10% from Oct 2008; dispatches to oil marketing companies had reached nearly 200,000 litres daily.

• Management expected ethanol dispatches to proceed smoothly and anticipated new tenders for the 10% blending mandate.