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Tuesday, November 14, 2006
Indiainfoline - Shree Renuka Sugars Ltd Q4 F9/06
Tax credit of Rs8mn in the quarter as against a tax payout of Rs33mn last year led to a 8.9% yoy increase in net profit to Rs91mn while for the full year PAT increased by 66.1% yoy to Rs556mn
* Net sales increase by 9.1% yoy.
* Operating margin declines by 30bps yoy as other expenditure surges by 720bps yoy
* Pre tax profit declines by 24.9% yoy on the back of higher operating and interest costs.
Operational Highlights
* For Q4 F9/06, net sales increased by 9.1% yoy to Rs2,390mn while for the full year ended September 30, sales increased by 25.4% yoy to Rs8,016mn.
* Shree Renuka Sugars (SRS) crushed about 1.75MMT of cane in 2005-06 and produced about 0.2MMT of sugar at an average recovery of about 11.24%.
* Average cane price paid to farmers in the 2005-06 season was about Rs1,200/MT.
* Sugar realizations for F9/06 were above Rs16,000/MT, an increase of about 5% yoy.
* Sugar inventory as of September 2006 was about 22,000MT (including re-export obligations).
* Operating margin shrunk by about 30bps to 7.1% as compared to same period last year mainly on account of higher ‘Other expenditure’ which surged by 720bps yoy.
* Interest cost increased by 88.3% to Rs63mn as borrowings increased to fund expansion plans in different segments.
* Although pre tax profits for Q4 F9/06 declined by 24.9% yoy, a tax credit of Rs8mn in the quarter as against a tax payout of Rs33mn last year led to a 8.9% yoy increase in net profit to Rs91mn while for the full year PAT increased by 66.1% yoy to Rs556mn translating into an EPS of Rs23.3 for F9/06.
Outlook
* The company would expand its crushing capacity to 25,250TCD in the current sugar season while co-gen capacity would be about 103MW of which approximately 60MW would be surplus power exported to the grid.
* It expects crushing operations in the 2006-07 season to last for more than 200 days with recovery rates of about 11.5% while co-gen plants would be operational for about 270 days.
* With domestic sugar prices expected to remain flat on account of buoyant sugar production of about 22mn tons in 2006-07, growth would mostly accrue from volume expansions in sugar and from by-products like ethanol and co-gen power.
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