Local ops' profitability to improve post Apr: Shree Renuka

Though the quarter was operationally weak, the Belgaum-based sugar manufacturer reported a net profit of Rs 344 crore mainly on the back of forex gains.   

Murkumbi said the company is in advanced stages negotiations to sell its stake in Cogen and an announcement would be made shortly.

Also Read: Better prices to help record profits in Q4, says Sakthi Sugars

Below is the edited transcript of Murkumbi’s interview with CNBC-TV18. Also watch the accompanying video.

Q: Can you tell us in detail the Brazil performance for the current quarter, both in terms of yields and EBITDA?

A: Our Brazil results are on expected lines following from our results in the last quarter. However, I must point out that in both companies we made a cash profit. Even in Renuka, the Brazil where we have been hit by severe drought and reduction in cane supplies we made a cash profit of Rs 71 crore this quarter. In Vale do Ivai, which is our first acquisition we have made PAT of about Rs 60 crore so the EBITDA is above Rs 100 crore.

All together in Brazil, we have had a good showing of Rs 240 crore of EBITDA and in India our EBITDA is above Rs 100 crore. Overall we are getting back to normalcy. Our main effort in this previous quarter has been in Brazil where we have completed our planting target of 20,000 hectare of cane and we should see the positive results from that from April-June quarter of this year.

Q: The market would have expected to hear news about the cogeneration unit sale in Brazil by now which we spoke about last quarter. Any reason why that has not happened yet?

A: November and December things were moving relatively slowly given what was happening in global market. But I am hopeful of announcing something very soon. We are in an advance stage, we have to decide on exclusivity with the preferred buyer and you should see an announcement later this month.

Q: With this EBITDA performance on Brazil operations this quarter, have you been able to meet the guidance that you set out on the EBITDA line for Brazil?

A: Our earlier guidance was based on a much better crop, but we have stabilized results. We are on course with what we discussed after the last earnings quarter.

Q: Can you give us specific number both in terms of realizations that you enjoyed in your Brazil operations and domestically in India?

A: In Brazil our blended average is about 25 cents for the quarter. Domestically, our domestic sales are at about Rs 27.5 for the last quarter. Export sales were much higher, gross sales before logistics costs were close to Rs 35. This is because most of our exports are of refined sugar, which is sold at a much higher price. It is also helped by the weaker rupee relative to last year.