Balrampur Chini Mills Limited (BCML), one of the largest integrated sugar manufacturing companies in India, announced its results for the first quarter ended 31 December 2009.
Sugar revenues increased to Rs4.07bn during the quarter as compared to Rs3.79bn in FY09. This was primarily on account of enhanced realizations
Allied businesses continued to contribute to top-line with 13% of the total revenues
With an increase in co-generation tariffs over last year and open access policy announced by the UP government, the Company expects the power division to post improved revenues going forward.
The core sugar segment continues to be a key contributor to PBIT
77.2 % of PBIT on account of the sugar division
Highlights for the quarter
In Q1 FY10, sugar production for the Company was marginally lower by 3.5% when compared to corresponding period last year
BCML crushed 181.9 lakh quintal during the quarter as compared to 191.5 lakh quintal in FY09
The Company achieved comparatively high recoveries – recoveries for the quarter stood at 8.96% as compared to 8.82% in FY09
Recoveries are expected to improve during the season
Modification of boilers at the Haidergarh and Mankapur units into multi feed units under implementation – Haidergarh to be commissioned by April 2010 and Mankapur unit during season 2010-11.
Will enable BCML to capitalize on the Uttar Pradesh government’s open- access power policy and sell power in the during off-season
The continuous availability of power during off-season will enable the Company to refine raw sugar throughout the year
BCML plans to install a 500 metric tonne refinery at the Haidergarh - which will result in higher asset utilization
Refinery to process raw sugar using coal as alternative fuel as feedstock during off-season
Current imports for BCML stands at 81,750 tonnes of raw sugar
Of the total imported raw sugar, 21,000 tonnes already reached the factory of which 8,180 tonnes has been processed during the quarter
Sector update
Sugar demand supply mismatch continues in the current season
India’s sugar production expected to be around 15mn tonnes in the current season
Sugar consumption continues to rise steadily and stands at around 23mn tonnes for the current year
Global sugar market witnessing sugar deficit on account of lower production in Brazil due to excess rain and high import demand from India
On account of global sugar deficit, realizations have continued to remain firm
Commenting on the performance for Q1 FY2010, Mr. Vivek Saraogi, Managing Director, Balrampur Chini Mills Limited, said: “The Company continues to deliver healthy results quarter on quarter. Sugar segment reported a strong performance on the back of enhanced realizations. Due to the cane shortage, the key challenge for us this year would be procurement of cane. Our good relationship with farmers should help us tide this problem with some ease. While we simultaneously continue to work with farmers to encourage them to grow more cane.
At BCML, our goal is to achieve optimal utilization of our units and improve cost efficiencies which would further enhance our profitability going ahead and thus improve the earnings ability of the Company.”
Q1 FY10 performance overview (Compared with FY09)
Net revenues stood at Rs4,394.8mn as compared to Rs4,294.5mn
Operating profits increases 13.8% to Rs1,316.4mn from Rs1,157.2mn
Net profits enhances 49.2% to Rs765.5mn versus Rs512.9mn
Cash Profit higher by 31.2% at Rs1034.20mn from 788.3mn
Q1 FY10 Operating overview (Compared with FY09)
Company produced 16.3 lakh quintals of sugar during the quarter as compared to 16.9 lakh quintals in FY09. BCML has crushed 181.9 lakh quintals during the quarter as compared to 191.5 lakh quintals.
Recovery of Sugar for the quarter increased to 8.96% as compared to 8.82% in Q1 FY09
Realizations (blended) improves 71.5% and now stand at Rs30.30 per kg in Q1 FY10 versus Rs17.66 per kg in the corresponding quarter of last year.
Distillery division production stood at 2189.6 KL in Q1 FY2010, as compared to 12,346.2 KL in FY09.
Production from Co-generation segment was 1235.6 lakh units in the first quarter as compared to 1,684.1 lakh units in FY09.