Shree Renuka Sugars (RENUKA) Q4 09/10 earnings summary

Executive summary

• FY ended Sep. 30, 2010 marked expansion into Brazil through acquisitions of 100% of Renuka Vale do Ivai and 50.34% of Equipav, building a major sugar and ethanol platform across India and Brazil.

• Consolidated crushing capacity was 94,520 TCD; management projected 22 million tonnes of cane crushing capacity in the next financial year.

Financial highlights

• Consolidated total income rose 178% to ₹78,516 million; EBITDA increased 188% to ₹13,575 million, PBT to ₹8,741 million and PAT to ₹7,034 million, up 215%.

• Consolidated basic and diluted EPS was ₹10.75 vs. ₹7.80; pro forma EPS in the historical performance table was ₹10.33 vs. ₹7.05.

• Standalone revenue reached ₹55,979 million, up 150%; EBITDA was ₹7,246 million, up 97%, and net profit was ₹4,101 million, up 186%.

• Q4 manufactured sugar sales increased 36% YoY to 384,591 MT; average net realization was ₹26,670/MT vs. ₹24,762/MT.

Outlook and guidance

• Improving utilisation and efficiency at acquired Brazilian mills was a priority; the assets had been operating below 70% capacity utilisation, and acquisitions were described as EPS-accretive.

• A 3,000 TPD standalone refinery at Kandla was under construction and expected to begin operations in April 2011; management also cited a 22 million-tonne cane-crushing capacity target for the next financial year.

• Letters of intent covered 118 million litres of ethanol supply to oil marketing companies for one year across five Indian states.