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EID Parry (India) Limited Conference Call Summary
Date and Purpose • Date: May 27, 2024 • Purpose: Discuss audited financial results for Q4 and full year ending March 31, 2024.
Financial Performance • Q4 FY24 Results: • Standalone revenue: INR 717 crores (down 11% YoY) • EBITDA: INR 166 crores (down from INR 327 crores YoY) • Profit after tax: INR 80 crores (slight decrease from INR 83 crores)
• Full Year Results: • Revenue: INR 2,809 crores (down from INR 2,895 crores) • Profit after tax: INR 107 crores (down from INR 197 crores, which included an exceptional loss)
Factors Affecting Performance • Decline attributed to: • Lower sugar recoveries • Increased cane costs • Lack of exports • Notable reductions in cane crush and sugar sales. • Distillery expansion nearing completion; refinery business showed growth. • Nutraceuticals Division facing certification issues in Europe.
Operational Highlights • Sugar Segment: • Total cane crush: 19.79 LMT (down from 22.95 LMT YoY) • Sugar production: 2.04 LMT; recovery rate: 10.69% • Sugar sales: 1.05 LMT; revenue: INR 436 crores (decline due to export restrictions)
• Cogeneration Segment: • Power generation: 1,741 lakhs units; revenue: INR 77.75 crores
• Distillery Segment: • Production: 3.31 crore litres; revenue: INR 224 crores
• Refinery Segment: • Revenue growth: INR 899 crores; positive EBITDA of INR 56.21 crores
Future Outlook • Cautious optimism for upcoming sugar season due to favorable conditions. • Government commitment to ethanol blending targets discussed. • Increased debt clarified as primarily due to inventory increases.
Strategic Initiatives • Focus on growing value-added product segments. • Introduction of new COO to enhance sugar and biofuel sectors. • Strategic review of nutraceutical and refinery segments; openness to alliances.
Expansion Plans • Plans to scale FMCG business, particularly in sweeteners and staples. • Targeting aggressive distribution expansion, especially in Tamil Nadu. • Positive feedback on staple product launches; plans for further product range expansion.
Marketing and Brand Strategy • AMP spending emphasized as a strategic investment for brand equity. • Challenges in sugar business due to climate and policy issues acknowledged. • Future separation of consumer business from sugar segment discussed.
Conclusion • No updates on dividends or buybacks; focus on improving operational metrics and addressing challenges in the sugar business.
E.I.D.-Parry (India) Limited Conference Call Summary
Financial Performance • Q3 FY24 Results: • Standalone revenue: INR 668 crores (down 8% from INR 725 crores in Q3 FY23) • EBITDA: INR 24 crores (down from INR 63 crores) • Standalone loss after tax: INR 14 crores (compared to profit of INR 16 crores in Q3 FY23)
• Nine-Month Results: • Revenue: INR 2,092 crores (slight increase) • Profit after tax: INR 27 crores (down from INR 114 crores)
Market Overview • Global Sugar Market: • Reduced surplus due to production cuts in several countries • India's sugar production projected at 315 lakh metric tons with plateauing consumption
• Company Segments: • Sugar segment affected by government export restrictions; domestic sales improved • Distillery operations showed better profitability despite new government policies • Nutraceutical segment reported losses due to certification issues in Europe
Operational Highlights • Sugar Operations: • Crushing commenced in Karnataka, Tamil Nadu, and Andhra Pradesh • Crushed sugar volume: 17.76 lakh metric tons (slight decline) • Cane costs increased to INR 3,543 per metric ton • Sugar sales volume decreased to 1.1 lakh metric tons; revenue down 16% to INR 449 crores
• Cogeneration and Distillery: • Cogeneration revenue: INR 60.74 crores (slight increase) • Distillery sales: 2.73 crore liters, revenue: INR 177 crores • Refinery operations revenue: INR 1,597 crores, profit before tax: INR 7 crores
Strategic Initiatives • Branded Sugar and Rice Markets: • Entry into branded sugar and rice markets emphasized • Focus on leveraging brand equity and targeting unbranded segments • Plans for regional rice varieties and partnerships for supply chain management
• Refinery Operations: • Kakinada Refinery profit before tax: INR 7 crores for the quarter; loss of INR 76 crores for nine months • Total investment in refinery: INR 583 crores, with INR 100 crores as impairment
Future Outlook • Ethanol Production: • Plans to produce 3 to 3.5 crore liters of ethanol in Q4 • Focus on grain and B-heavy production
• Market Trends: • Branded sugar market growth: approximately 9% • Company’s branded sugar volumes increased by about 30% year-on-year • Concerns about rising sugarcane costs and need for minimum support price (MSP) increase
• Pricing Insights: • Average sugar realization for Q3: INR 39 • Current prices slightly lower due to ongoing crushing season, with expectations for a rise post-season
Conclusion • Management expressed confidence in navigating industry challenges and anticipates future updates at the end of the financial year.
E.I.D.-Parry (India) Limited Conference Call Summary (November 9, 2023)
Overview • Conference call to discuss unaudited financial results for Q2 and half-year ended September 30, 2023. • Hosted by DAM Capital Advisors with key management participation.
Market Insights • Global Sugar Market: Surplus production but bullish price outlook due to rising crude oil prices and expected production shortfalls in India. • Indian Sugar Production: Estimated at 337 lakh metric tons for 2023-24, down from 368 lakh metric tons; no government export permissions expected.
Financial Performance • Q2 FY2024: • Standalone revenue: Rs. 726 crores (up 13%). • Profit after tax: Rs. 86 crores (slightly up from Rs. 85 crores). • Half-Year Results: • Revenue: Rs. 1,424 crores (up 4%). • Profit after tax: Rs. 40 crores (down from Rs. 98 crores).
Segment Performance • Sugar Operations: • Crushed 8.54 lakh metric tons of sugarcane; production increased to 70,000 metric tons. • Sugar sales volume: 1.27 lakh metric tons; revenue: Rs. 507 crores (up 9%). • Cogen Operations: • Power generation: 730 lakh units; revenue: Rs. 32 crores (up from Rs. 28 crores). • Distillery Operations: • Sold 304 lakh liters of alcohol; revenue: Rs. 190 crores (up from Rs. 141 crores). • Nutra Business: • Turnover decreased to Rs. 8.81 crores due to certification issues in Europe. • Refinery Business: • Revenue surged to Rs. 1,296 crores; profit before tax: Rs. 13.59 crores (up from a loss of Rs. 148 crores).
Management Insights • Confidence in maintaining operational performance and profitability, especially in the refinery segment. • No new factory plans outside the south; projected 30% growth in retail outlets. • Advertising expenditures around Rs. 15-16 crores, expected to rise with FMCG expansion.
Future Strategies • Focus on building brand equity in the sugar market. • Potential for growth in EBITDA per kg, especially in the branded sugar market. • Plans for future product launches in nutrition foods and value-added sweeteners.
Challenges and Concerns • Impact of export ban on topline and bottom line. • Seasonal nature of business and rising costs affecting profitability. • Need for patience in establishing the retail segment and brand visibility.
Conclusion • Management expressed optimism about future profitability and operational performance. • Emphasis on long-term investments in advertising and brand building. • Call concluded with Diwali wishes from management.
Conference Call Overview • Date: August 10, 2023 • Discussed: Q1 FY24 unaudited financial results • Key Participants: Managing Director, CFO, and other management members
Financial Performance • Standalone Revenue: INR 698 crores (down from INR 719 crores) • Loss After Tax: INR 46 crores (compared to a profit of INR 13 crores last year) • Profitability Declines: • Sugar and cogeneration segments affected by export restrictions and lower power realization • Distillery segment performed better due to increased volumes • Nutraceutical segment reported losses due to certification issues in Europe
Operational Highlights • Sugar Crushing Operations: Increased to 4.01 lakh metric tons (from 2.69 lakh metric tons) • Sugar Production: Rose to 33,000 metric tons (from 24,000 metric tons) • Sales Volume: Totaled 1.21 lakh metric tons (domestic: 1.14 lakh metric tons, exports: 7,000 metric tons) • Average Selling Price: Increased to INR 36.30 per kg (from INR 35.18 per kg) • Cogen Operations: Generated 522 lakh units of power (down from 869 lakh units) • Distillery Revenue: Increased to INR 209 crores (from INR 125 crores) • Nutra Business Turnover: Decreased to INR 5 crores (from INR 13 crores)
Expense Overview • Employee Expenses: Increased due to salary hikes and headcount growth • Finance Costs: Rose due to higher borrowings for ethanol project expansion • Refinery Business: Experienced a loss before tax of INR 96.52 crores (compared to a loss of INR 6.32 crores last year)
Strategic Focus • Capacity Expansions: Ongoing efforts to improve product offerings • FMCG Growth: Pursued both organically and inorganically • Nutraceutical Challenges: Expected turnaround in the second half of the year • New Food Categories: Pilot launch of rice and millet products
Future Plans • Ethanol Production: New distillery in Nellikuppam to align with government policies • Refinery Business Improvement: Focus on international trade collaborations and operational efficiency • Consumer Segment Growth: Plans to expand distribution and branding, particularly in sweeteners
Investor Concerns • Refinery Losses: Attributed to one-off incidents and geographical disadvantages • Partnerships: Discussed as a potential strategy to recover losses and improve profitability
Conclusion • Management expressed optimism for recovery in upcoming quarters despite current challenges.
Conference Call Overview • Date: June 6, 2023 • Discussed audited financial results for Q4 and full year ending March 31, 2023. • Key management members participated, including the Managing Director and CFO.
Financial Performance • Q4 FY23 Results: • Standalone revenue: INR 807 crores (down from INR 921 crores). • Profit after tax: INR 83 crores (impacted by INR 155 crore impairment loss).
• Full Year Results: • Revenue: INR 2,895 crores (increase). • Profit after tax: INR 197 crores (decrease).
• Sugar Division: • Improved sales realization despite energy cost pressures. • Q4 sugar production: 2.35 lakh metric tons (down from 2.68 lakh metric tons). • Year-to-date sugar sales volume: 1.20 lakh metric tons (down from 1.83 lakh metric tons).
Segment Performance • Cogeneration Segment: • Revenue increased to INR 104 crores (up from INR 86 crores).
• Distillery Segment: • Sales volume: 376 lakh liters; revenue: INR 238 crores (growth).
• Nutra Segment: • Decline in turnover but slight increase in profitability.
Operational Costs and Capital Expenditure • Employee-related expenses rose due to salary increases and headcount growth. • Overall operational costs increased due to higher production and sales activities. • Finance costs decreased due to improved working capital management. • Capex spending: INR 189 crores year-to-date.
Refinery Business • Increased sugar production but decline in sales volume and profitability. • Q4 loss: INR 45.32 crores.
Investor Inquiries • Impairment Expense: • INR 155 crores related to Parry Sugars Refinery, Algavista joint venture, and Alimtec.
• Capital Infusions: • No significant capital required for Parry International, DMCC.
• Refinery and Distillery Performance: • Lower sales volumes and forex losses impacted refinery performance. • Anticipated improvements due to better market conditions and reduced energy costs.
Future Outlook • Refinery aims for break-even in FY '24. • Debt confirmed at around INR 800 crores. • Focus on maintaining dividend payments while strengthening standalone business performance.
Conclusion • Management expressed optimism for future growth and strategic plans, thanking participants for their engagement.
E.I.D.-Parry (India) Limited Conference Call Summary
Date and Purpose • Date: February 15, 2023 • Purpose: Discuss unaudited financial results for Q3 and nine months ending December 31, 2022.
Key Market Insights • Global Sugar Market: • Prices increased due to higher demand from China. • Reduced production estimates from India and Europe. • India's Sugar Production: • Expected drop to 340 lakh metric tonnes. • Significant diversion to ethanol production.
Financial Performance Highlights • Standalone Revenue: • Q3 revenue: Rs. 727 Crores (6% increase). • Nine-month revenue: Rs. 2,095 Crores (33% increase). • Sugar Segment: • 10% increase in sugar crushing operations. • Sugar production rose to 1.70 lakh metric tonnes. • Average selling price of sugar: Rs. 36.24/kg. • Revenue from sugar segment: Rs. 539 Crores (10% growth). • Cogen Operations: • Generated 1341 lakh units of power. • Revenue: Rs. 56 Crores. • Distillery Operations: • Decrease in sales volume but increased price realization (Rs. 61.11/liter). • Revenue: Rs. 141 Crores. • Nutra Segment: • Slight decline in turnover.
Operational Challenges • Employee Expenses: Increased due to salary hikes and expansion. • Other Expenses: Significant rise due to higher production and operational costs. • Finance Costs: Decreased due to better cash inflows. • Capex Program: Rs. 148 Crores spent on safety and productivity improvements. • Refinery Business: Reported a loss before tax of Rs. 53.79 Crores due to factory accident expenses.
Analyst Q&A Highlights • Ethanol Production Margins: • Grain-based ethanol margins lower than syrup-based. • Juice-based ethanol profits at Rs. 4 to 7/liter. • Monsoon Impact: Concerns raised, but predictions deemed premature. • Debt Figures: Long-term and short-term loans detailed. • Unseasonal Rains: Potential impact on sugar production discussed. • Refinery Losses: Ongoing concerns about losses and debt levels. • Future Projections: Optimism about refining margins returning to previous levels.
Conclusion • Management expressed gratitude to participants, highlighting growth in several areas despite operational challenges in the refinery segment.