Capitaline

Analyst Meet / AGM 01-Jun-12

Conference Call

Greenply Industries

Guides 10% operating margin in Plywood segment in FY 2013

Greenply Industries conducted a tele conference call on 30 May 2012 to discuss the financial performance during the quarter ended March 2012 and for FY12. Saurabh Mittal, MD & CEO and Venkatramani, Chief Financial Officer, addressed the call
Highlights of the call are:

Greenply Industries reported 31% rise in Net Sales to Rs 458.37 crore in the quarter ended March 2012. Thanks to improved performances by the new MDF and Laminate units at Pantnagar, Uttarakhand and Nalagarh, Himachal Pradesh and the expansion of sales, the company reported 175% spike in net profit to Rs 16.26 crore during this period.

EBIDTA (excluding foreign currency gains / losses and other income) was up by 21.88% at Rs 44.28 crore as compared to Rs 36.33 crore in the same quarter of previous year.

Revenues from Plywood & Allied Products segment grew by 16.59% to Rs 217.22 crore during the quarter, contributing 47% of net revenue. Laminates & Allied Products segment grew by 18.63% to Rs 159.07 crore, contributing 35% of net revenue. Medium Density Fibreboards (MDF) segment grew by 164.21% to Rs 82.09 crore, contributing 18% of net revenue.

Average capacity utilization of Plywood segment was 123% during the quarter. Average realization increased to Rs 235 during the quarter ended March 2012 from Rs 220 in the corresponding previous quarter.

Average capacity utilization of Laminates segment was 93% during the quarter. During this period, Average realization of laminates increased to Rs 601 per sheet from Rs 488 per sheet in the corresponding previous quarter.

Net sales for the year ended 31 March 2012 grew by 35.05 % to Rs 1642.27 crore compared to Rs 1216.09 crore in the year ago period. EBIDTA (excluding foreign currency gains / losses and other income) was up by 57.45% at Rs 183.34 crore as compared to Rs 116.44 crore in FY11. EBIDTA Margin recorded a growth of 159 basis points at 11.16% compared to 9.58% in FY11. Net Profit was up by 112.87% at Rs 53.41 crore as against Rs 25.09 crore in FY 2011. Earnings Per Share (EPS) on diluted basis for FY12 was Rs 22.13 as compared to Rs 10.39 in FY11.

Exports increased by 14% to Rs 183.72 crore in FY 2011-12 (FY 12).

Working capital cycle was 32 days for FY12 from 34 days for FY11.

Revenue from Plywood segment grew by 20.96% to Rs 815.58 crore during FY12, contributing 50% of net revenue. Laminates segment grew by 17.49% to Rs 582.98 crore during FY12, contributing 35% of net revenue. MDF segment revenue grew by 435.83% to Rs 243.72 crore, contributing 15% of net revenue during FY12.

Average realization of Plywood segment increased to Rs 235 during FY12 from Rs 211 during FY11.

Average realization of Laminates segment increased to Rs 558 per sheet during FY12 from Rs 480 per sheet during FY11.

The company guided that it would achieve operating margin of 10% in Plywood segment in FY 13.

The company is in the process of expanding its Gujarat unit.

MDF is replacing plywood. The company is present in the premium and medium segment of MDF. It is selling the MDF to retail customers.

Foreign currency loss was about Rs 8.72 crore in FY12 and it has been capitalized during the year.

The company targets optimum capacity utilization during FY13 (year ending March 2013) and better value-mix in the new MDF and Laminate plants

Of the entire business revenue, 15% is from outsourcing business for the company. Operating margins are at 7% to 8% in outsourcing business.

Maintenance capex is about Rs 13 crore every year.

Of the forex loss during the quarter Rs 1.5 crore was from Laminates segment and Rs 15 lakh from MDF segment. Of the forex loss during FY12, Rs 11.6 crore was from Plywood segment, Rs 4.37 crore from Laminates segment and Rs 1.73 crore from MDF segment.

Increase in Other Income during the quarter is due to interest income.

International business was profitable during the year. US business would grow at 35% to 40% this year.

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