Sula Vineyards (SULA) Q4 19/20 earnings summary

Executive summary

• FY20 consolidated revenue fell 4.8% YoY to ₹531.1 cr and EBITDA declined 27.8% to ₹50.0 cr; the consolidated result was a net loss of ₹13.5 cr.

• COVID-19 closures and alcohol-sale restrictions disrupted operations late in FY20; production and sales resumed in phases, with slow demand expected in FY21.

Financial highlights

• Consolidated revenue was ₹531.1 cr versus ₹557.6 cr in FY19; EBITDA was ₹50.0 cr versus ₹69.3 cr.

• Consolidated loss before tax was ₹17.4 cr, net loss ₹13.5 cr and diluted EPS was negative ₹8.82, versus FY19 profit of ₹7.2 cr and EPS of ₹4.75.

• Standalone revenue declined 14.6% to ₹430.6 cr; EBITDA fell 33.7% to ₹53.4 cr and EBITDA margin was 9.4%, down from 12.4%.

• Standalone net loss was ₹8.2 cr and diluted EPS was negative ₹5.43, compared with FY19 profit of ₹19.6 cr and EPS of ₹13.16.

Outlook and guidance

• Slow FY21 demand was anticipated after the pandemic; wineries and resorts reopened in phases with safety measures, and sales resumed in a staggered manner.

• Solar power supplied 54% of energy; target is 75% by FY23.

• Management cited uncertainty around the pandemic’s effect on operations and financial results, with the eventual impact dependent on future developments.