Bajaj Hindusthan held a conference call on 23rd April 2009 to discuss the results and operational performance for second quarter ended March 2009. Kushagra Bajaj, joint MD, addressed the call.
Highlights of the concall
- The net revenue of Bajaj Hindusthan for second quarter ended March 2009 (on standalone basis) dipped by 13% Y-o-Y to Rs 424.86 crore. The other operating income for the quarter stood at 91.07 crore which include reversal of provision for foreign exchange fluctuation amounting to Rs 83.65 crore made earlier, as the company has adjusted the forex loss to capital assets.
- The revenue in sugar division dipped by 12% to Rs 407.88 crore while that from distillery segment has declined by 44% Y-o-Y to Rs 38.63 crore and from power business dipped by 39% to Rs 49.86 crore.
- The net profit of the company for the quarter stood 89% up at Rs 81.39 crore.
- The company has sold about 1.7 lakh tonne of sugar during the quarter and the average realization being at Rs 20.33 per kg. The company has also sold 40 lakh liter alcohol during the quarter at average realization of Rs 26 per liter.
- The company produced 6.5 lakh tonne of sugar during the quarter and at the end of the quarter has inventory of 6.1 lakh tonne costing at Rs 18.50 per kg (net of excise but including interest and depreciation cost).
- As on 1st April 2009, the company has molasses inventory of 15 lakh quintal and alcohol inventory of 60 lakh liters. The average realization for molasses was about Rs 355 per quintal, Rs 26 per liter for alcohol and Rs 22 per liter for ethanol, during the quarter.
- The landed cane cost for the company for the season was about Rs 150 per quintal.
- The ethanol; supply contracts with OMCs (oil marketing companies) will expire in Oct-09, the company has extended the same and entered in agreement for 2 more years.
- The company has crushed 72 lakh tonne of cane this season (on standalone basis) at average recovery of 9.2%. Thus the sugar production during the season being at about 6.62 lakh tonne.
- The current sugar prices are about Rs 25-26 per kg and the management expects the sugar prices to sustain at this level atleast.
- The management expects the sugar production in next sugar season to be about 16.5 – 18 million tonne. In the current sugar season the sugar production is about 14 million tonne.
- The raw sugar import at the current prices is economically viable but as the sugar mills have stopped operations, only the standalone refineries would be able to import and refine. The company expects the total import of sugar not to exceed 3 million tonne (including white sugar import)
- On standalone basis the company has debt of Rs 3300 crore (including FCB, mark to margin and working capital loan). The average cost of debt for the quarter being at 8.65% (8.45% in corresponding previous quarter). The company expects the debt level to come down between this to next year as will replay from cash flows.
- The company expects to produce 10 lakh tone of sugar in next sugar season on the back of improved recovery and better cane availability.