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Apex Frozen Foods Limited Q4 and FY24 Earnings Conference Call Summary
Financial Performance • Q4 FY24 Revenue: Rs.162 crores, down from Rs.212 crores YoY. • Sales Growth: 31% increase in sales to the European Union. • Challenges: Subdued U.S. demand and lower global shrimp prices.
Future Outlook • Growth Potential: Optimism for EU market growth pending regulatory approvals for Ready-to-Eat products. • Debt and Cash Flow: Reduced debt and improved cash flow noted.
Regulatory and Market Dynamics • Ecuadorian Duties: • Preliminary countervailing duties (CVD) and anti-dumping duties confirmed. • Ecuador's anti-dumping duty at 10.58%, Indonesia at 6.3%. • India's Duties: 1.35% anti-dumping duty and 4.36% CVD.
Market Conditions • U.S. Market Demand: Current pressure acknowledged, but hope for recovery as inflation stabilizes. • Impact of CVD: Slight price increase for shrimp exports to the U.S. due to CVD and rising freight costs.
Operational Insights • Depreciation Expenses: Significant decrease attributed to reassessing asset lifespans. • Hatchery Sales: Slight increase noted, but farmers remain cautious due to low prices and market uncertainties.
Competitive Landscape • Ecuador vs. India: New duties may level the playing field in the U.S. market. • European Market: Increased revenue share from Europe, with duties on Indian shrimp at 4.3% for RTC and 7.7% for RTE products.
Closing Remarks • Market Share Inquiry: Leading Ecuadorian shrimp processing company generates over a billion USD in exports. • Future Engagement: Participants invited to send further inquiries via email.
Apex Frozen Foods Limited Q3 and 9MFY24 Earnings Conference Call Summary
Financial Performance • Q3FY24 Revenue: Rs 148 crores, down from Rs 230 crores YoY. • Sales Volume: 2,117 metric tons, decreased from 2,869 metric tons YoY. • Average Realization: Rs 663 per kilo, down from Rs 748. • EU Sales Growth: Increased by 50% YoY, improving sales mix.
Market Challenges and Strategies • U.S. Market Impact: Lower sales due to Ecuador's shrimp supply and global price declines. • Future Optimism: Establishing a U.S. subsidiary for logistics and market development. • Antidumping Duties: Monitoring U.S. Department of Commerce investigations for potential impacts.
Product Approvals and Capacity Utilization • RTE Shrimp Products: Pending EU approvals since 2019, expected to boost business. • Capacity Utilization: Currently below 50%, with expectations of improvement in FY25.
Sales Dynamics and Pricing • RTE Product Sales: Decline attributed to reduced supermarket chain sales; optimism for new programs in FY25. • Pricing Dynamics: Low shrimp prices expected to rebound due to supply constraints and tariffs.
Growth Outlook • FY24 Slowdown: Acknowledged due to weak overseas demand and supply chain issues. • FY25 Targets: Aiming for sales volumes of 15,000 to 18,000 metric tons.
External Factors • Ecuador's Civil Unrest: Minimal impact on pricing or supply chains noted. • Freight Costs: Slight increase due to the Red Sea conflict, but below pandemic levels.
Collaboration and Market Strategy • Targeting Higher-Value Markets: Focus on the U.S. and EU for value-added products. • Support for Aquaculture: Positive outlook on government allocations to the fisheries sector.
Conclusion • Cautious Optimism: Despite current challenges, management expresses hope for recovery and improved market conditions in the upcoming quarters.
Apex Frozen Foods Limited Q2 and H1 FY24 Earnings Conference Call Summary
Submission Details • Date of submission: November 28, 2023 • Event: Q2 and H1 FY24 Earnings Conference Call • Date of call: November 21, 2023 • Signed by: Managing Director Karuturi Subrahmanya Chowdary
Financial Highlights • Net Revenue Decline: 22% year-over-year, totaling Rs 242 crores • Sales Volume: Decreased by 13% • Average Realization: Decreased by 10% due to weak USA demand • Sales Metrics: • Q2 FY24 sales: 3,084 metric tons (down from 3,565 metric tons last year) • EU market sales: 63% year-over-year increase, now 40% of total sales • Average realization: Rs 738 per kilo (6% sequential improvement) • Profitability: EBITDA margin improved to 8.1% (up 300 basis points quarter-over-quarter)
Strategic Focus • Establishing a wholly-owned subsidiary in the USA for logistics and market development. • Cautious optimism for demand recovery in the USA and EU during the holiday season. • Exploring new markets to diversify revenue streams.
Ecuadorian Shrimp Production • Consistent supply but facing challenges due to rising costs and government policy changes (removal of diesel subsidies). • Anticipated 10% cost impact expected to affect production and pricing strategies in 2024.
Domestic Shrimp Farming in India • Farmers adopting cautious approaches due to high costs and stagnant prices (around Rs 300). • Adjustments in stocking densities and production strategies reflecting subdued industry mood.
Capacity Expansion and Market Access • Capacity expansion in ready-to-eat (RTE) and ready-to-cook (RTC) products totaling 25,000 metric tons. • Challenges accessing the EU market due to pending regulatory approvals for three years. • Optimism for future EU-India discussions on free trade agreements to reduce import duties.
Market Landscape and Production Costs • Discussion on production costs for ready-to-cook shrimp in India vs. Ecuador. • Ecuador's focus on commodity shrimp products; challenges in scaling up value-added products due to labor shortages. • Shorter shipping times from Ecuador to the U.S. make their products appealing despite production challenges.
Impact of Super El Niño • Anticipated significant effects on shrimp production in Ecuador and Latin America, though the extent is uncertain. • Company does not manufacture shrimp feed, limiting insights on feed cost impacts.
Conclusion • Call concluded with an invitation for further inquiries via email.
Apex Frozen Foods Q1 FY24 Earnings Conference Call Summary
Financial Highlights • Date of Call: August 17, 2023 • Net Revenue: INR 253 crores • 20% quarter-on-quarter growth • 8% year-on-year volume decline due to subdued U.S. demand
Market Diversification • Focus on expanding presence in Europe and the UK • Aims to mitigate challenges from: • High inflation • Competition from Ecuador's shrimp supply • Management expresses cautious optimism for improved demand in the holiday season
Ready-to-Eat (RTE) Product Expansion • Capacity Increase: 5,000 metric tons commissioned in May 2023 • Commercial production began in June • Targeting retail markets over food service • Expected optimal utilization: 7,000 to 8,000 tons out of 10,000 tons
EU Market Approvals • Positive developments regarding EU market approvals expected by end of Q2 or early Q3 2023 • Estimated 40 to 50 Indian suppliers approved for RTE products in the EU
Competition and Market Dynamics • Ongoing competition from Ecuador in the U.S. market • Ecuador's shrimp production expected to reach 1.2 to 1.5 million metric tons • Shift in focus towards promoting global shrimp consumption
Supply and Demand Challenges • Q2 typically sees better shrimp production; however, challenges anticipated this year • Farmers focusing on larger shrimp sizes due to changing demand patterns
Cost Pressures and Market Strategy • Rising labor and feed costs alongside declining selling prices • Producers adapting by optimizing costs and increasing automation • Cautious exploration of new markets, including inquiries from Russia
India's Global Market Share • India's market share stagnant due to production levels compared to Ecuador • Apex must boost production or rely on competitors' declines to maintain market share • Diversification of product offerings to absorb fixed costs and increase market share in the EU and UK
Conclusion • Call concluded with an invitation for further inquiries via email.
Apex Frozen Foods Q4 FY23 Earnings Conference Call Summary
Submission Details • Date of submission: June 9, 2023 • Call date: June 5, 2023 • Submitted to: Bombay Stock Exchange and National Stock Exchange of India • Signed by: Karuturi Subrahmanya Chowdary, Managing Director and Interim CFO
Financial Highlights • Volume Growth: 8% year-on-year increase in shrimp sales • Ready-to-Eat Products: Comprise 22% of sales; capacity expanded • Net Revenue: Increased by 16% to Rs 10,703 million • EBITDA and Profit: Decreased due to higher material costs and a Rs 7.5 crore write-off • Balance Sheet: Improved with reduced gross debt and working capital days
Market Insights • US Market: Stable demand; slow inventory consumption attributed to recession and inflation • EU Market: Potential for growth, especially in ready-to-cook products • China: Continued demand expected • New Markets: Exploring opportunities in Saudi Arabia, South Korea, and Japan
Challenges and Strategies • Regulatory Issues: Facing challenges in Saudi Arabia • Demand in New Markets: South Korea and Japan show potential for value-added products • Write-off Clarification: Rs 7.5 crore write-off related to shrimp seed sales, confirmed as one-off
Future Projections • Ready-to-Eat Products: Projected volume of 3,000 to 5,000 metric tons for FY24 • Sales Volume Expectations: Anticipating around 7,000 metric tons in the first half of the fiscal year • Raw Material Costs: Recent decrease noted, but caution expressed about future price stability
Inventory and Working Capital • Inventory Breakdown: Total around Rs 180 crores, with Rs 165 crores in finished goods • Working Capital Improvement: Expected due to better realizations and inventory utilization
Closing Remarks • Encouragement for Questions: Participants invited to reach out via email for further inquiries • Optimism for Future Sales: Expectation of a minimum of 30% incremental sales in upcoming quarters
Apex Frozen Foods Q3 FY23 Earnings Conference Call Summary
Date and Submission • Date of Call: February 15, 2023 • Submission Date: February 20, 2023 • Submitted to: Bombay Stock Exchange and National Stock Exchange of India
Key Financial Highlights • Shrimp Sales: 10,193 metric tons (6% YoY increase) • Net Revenue: Rs 813 crores (16% rise) • Ready-to-Eat Segment Growth: 20%
Challenges Faced • Inflationary Pressures: Affected demand in U.S. and EU markets • Supply Constraints: Specific shrimp sizes impacted • Production Challenges: Due to new production line installation
Optimistic Outlook • Anticipation of demand recovery and supply improvements with new harvest season • Expected EU approval for new plant by April/May
Inventory and Production Insights • Inventory Levels: Reduced to Rs 175 crores • Order Book: Significantly lower compared to previous quarters • Production Capacity: New Ready-to-Eat line nearing completion
Market and Pricing Dynamics • Farm Gate Prices: Stabilized after low period; focus on value-added products • Government Budget Impact: Duty concessions on imported inputs expected to positively affect costs
Revenue and Customer Breakdown • Utilization Levels: Expected increase in FY '24 • Customer Focus: Balanced approach to retail and food service in the U.S. market
EBITDA and Margin Expectations • EBITDA Margins: Anticipated return to 11%-12% with increased production capacity • Ready-to-Eat vs. Ready-to-Cook Margins: Average margin of $0.50 per kilo
Future Capacity and Revenue Projections • New Capacity: Estimated additional Rs. 200 crores in export sales if 50% utilized in the first year • Total Capacity: 10,000 metric tons operational by March FY '23
Production Cost Influences • Cost Factors: Include feed, land lease, electricity, and disease management • Survivability Impact: Lower survivability leads to higher costs per kilo
Conclusion • Focus on Competitiveness: Government initiatives aimed at improving survivability and reducing costs • Mixed Farmer Responses: Varied approaches to stocking densities among farmers
Closing Remarks • Choudary thanked participants and invited further inquiries.