Shree Renuka Sugars (RENUKA) Q4 08/09 earnings summary

Executive summary

• Consolidated FY09 total income rose 33% YoY to Rs. 28,225 mn; EBITDA reached Rs. 4,721 mn and PAT Rs. 2,235 mn, up 67% YoY.

• A refining-led, multi-business strategy aimed to reduce dependence on domestic cane supply, supported by Brazilian feedstock and operating assets.

Financial highlights

• Standalone FY09 turnover was Rs. 22,398 mn, up 23% YoY; EBITDA was Rs. 3,685 mn, up 69%, and PAT was Rs. 1,435 mn versus Rs. 927 mn.

• Consolidated FY09 PBT rose 85% to Rs. 2,968 mn; net worth was Rs. 15,274 mn versus Rs. 8,320 mn in FY08.

• Standalone net revenue was Rs. 22,342 mn after excise duty; financial expenses rose 30% to Rs. 884 mn, primarily on higher capex and working-capital borrowings.

Outlook and guidance

• Throughput was expected to rise ~70% by sweating existing assets, with near-term growth led by refining amid poor domestic cane availability.

• A 3,000 TPD Gujarat refinery was targeted for commissioning in FY11; investment was expected to exceed Rs. 4,000 mn over 12 months, funded by debt and equity.

• Sugar realizations were expected to remain robust in the off-season; imports were expected to increase, supporting refining prospects.

• Brazilian mills were to be modified toward 75% sugar output to support raw-sugar feedstock plans; additional supply deals were also under consideration.