SHREE RENUKA SUGARS LIMITED - RESULTS FOR Q/E JUNE,2012 - company upbeat - Sales up 23& Yoy and 51% QoQ - NPT higher by 142% QoQ but lower YoY - Brazilian results awaited

SHREE RENUKA SUGARS LIMITED

RESULTS FOR Q/E JUNE,2012

Highlights

SHREE RENUKA SUGARS LTD has released reasonably good results for the quarter ending June,2012. The figures and the Percentage comparison are indicated in the table below

RESULTS TABLE (Figures in Millions)

In Mns	q/e	QoQ %DIF	Q/E	YoY% DIF	Q/E
ITEMS	30.06.2012		31.03.2012		30.06.2011
Net Sales	14,839	51	9,803	23	12,072
MaterialsCost	3,906	-55	8,620	-10	4,341
PurchasesOf SIT	1,842	-54	3,995	-3	1,891
Changes in FG/WIP/SIT	6,174	-199	-6,254	90	3,246
EmployeeBenefits	298	0	298	21	246
Depreciation	377	20	314	70	222
OtherExp	821	-30	1,180	-16	975
TotalExpenses	13,418	65	8,153	23	10,921
Profit from Operations	1,421	-14	1,650	23	1,151
FinanceCosts	1,136	17	972	122	512
ExceptionalItems	-81	-84	-508		-
ProfitBefore Tax	204	19	171	-66	595
TaxExpense	71	-39	116	-42	123
NetProfit	133	142	55	-72	472
Paid-upEquity	671	0	671	0	671
Basic EPS	0.2	150	0.08	-71	0.7

Commenting on the results and performance, Mr. Narendra Murkumbi, Vice Chairman and Managing Director of Shree Renuka Sugars said:

“The current quarter has been good for our Indian Business which benefited from better price for sugar (both domestic as well as export) and ethanol. It has also witnessed increased refining operations from our recently commissioned sugar refinery near Kandla, Gujarat. Although it was an off-season period in India, the current quarter marked the beginning of a new crushing season in Brazil where consistent rainfall over the last few months has raised hopes for an improvement in crushing volumes over last year.

Owing to loss of time every quarter in converting the financials for our Brazilian subsidiaries from Brazilian GAAP to Indian GAAP, the management has taken a decision to release only the standalone financial result for the quarter ended 30^th,June, 2012 currently. The consolidated results will be released in 4 weeks.

Company has reported a net profit of Rs.133 million for the quarter ended 30^th, June 2012. Higher sales volume and prices have effected in improved EBITDA margin of 12.1% against 11.0% during the same period last year. Sugar segment has been highly profitable with EBIT profit of 1,325 million along with trading and ethanol segments.

We have witnessed a steep rise in domestic sugar prices over the last few weeks, mainly due to deficient rainfall in the major sugar producing states and reduced production estimates for the 2012/13 season. The company will benefit from the increased prices in the coming quarters. The refinery business will be positively impacted due to the absence of competition from white sugar exports from India in the foreseeable future.

The crushing in the first quarter was significantly lower in our Brazilian mills than the same period last quarter due to unusually heavy rainfall in May and June. However, we expect to benefit in terms of improved yields and extended crushing season over the rest of the season over the rest of the year. Management efforts are currently concentrated in improving the agricultural as well as industrial productivity in our Brazilian mills.“

 Net Sales for the quarter at Rs. 14,839 million; higher by 23.4% over previous year

 Sugar price realisation higher by 8.3%

 Improved yields and better rainfall in Brazil

MARKET OVERVIEW : Key Perspectives :

 World Raw Sugar prices have corrected lower on account of improved crushing in Brazil

 Indian domestic sugar prices higher than world white sugar prices

 Rainfall in India has improved over sugar cane growing areas. However, sugar production  expected between 23.5 – 24.5 million MT in 2012- 13 crushing season

Fact Sheet

Shree Renuka Sugars is a global agribusiness and bioenergy corporation. The Company is one of the largest sugar producers in the world, the leading manufacturer of sugar in India, and one of the largest sugar refiners in the world. Shree Renuka operates in three segments:

Sugar: The Company operates eleven mills globally with a total crushing capacity of 20.7 million tonnes per annum (MTPA) or 94,520 tonnes crushed per day (TCD).

The Company operates seven sugar mills in India with a total crushing capacity of 7.1 MTPA or 35,000 TCD and two port based sugar refineries with capacity of 1.7 MTPA.

The Company also has significant presence in South Brazil, through acquisitions of Renuka Vale do Ivai on 19 March 2010 (100% owned) and Renuka do Brazil on 7 July 2010 (formerly Equipav Acucar e Alcool – 50.34% stake for USD 250 million). The company has exercised its option to increase its stake to 59.4% at the same valuation. By further investment of USD 115 million. The combined crushing capacity of the Brazilian subsidiary companies is 13.6 MTPA.

Trading: Operates a trading hub in Dubai to capitalize on trade opportunities in the Asian region.

Power: Shree Renuka produces power from bagasse (a sugar cane by product) for captive consumption and sale to the state grid in India and Brazil. Total Cogeneration capacity increased to 537MW with exportable surplus of 356MW Indian operations produce 242MW with exportable surplus of 135MW and Brazilian operations produce 295MW with crushed a record 556.5 million tonnes of sugarcane. However, due to the effect of drought, bad weather and unpredicted frost, this year, it has crushed approximately 493 million tonnes and produced 31.3 million tons of sugar and 20.7 million m3 of ethanol.

India, the world’s largest sugar consumer and second largest producer, is a key player in the global sugar supply/demand dynamics. The sugar industry in India is highly fragmented. There are 624 sugar factories, dispersed over UP, Maharashtra etc.

Ethanol: Shree Renuka manufactures fuel grade ethanol that can be blended with petrol. Global Distillery capacity is 6,240 KL per day (KLPD) with Indian distillery capacity at 930 KLPD (630 KLPD from molasses to ethanol and 300 KLPD from rectified spirit to ethanol) and Brazil distillery capacity at 5,310 KLPD.

The acquisition of a majority stake in KBK ChemEngineering (80.28% owned) facilitates turnkey distillery, ethanol and bio-fuel plant solutions.

INDUSTRY

The top 5 sugar producing countries are Brazil, India, China, Thailand and USA.

Reduction in estimates in Brazil have been off-set by higher production estimates from Asian countries mainly India and Thailand. India had a stronger crushing 2011-12 season with estimated production of 26.0 million tonnes of sugar. This has off-set the adverse affects on yields in Brazil (largest produced/exporter) by the effect of drought in 2010-11, lower rains in 2011-12 and other factors like frost and flowering of the cane.

Brazil is the leading producer and exporter of sugarcane, sugar and ethanol. It is among the most efficient major sugar producers in the world. During the 2010/11 harvest, Brazil and other states, with average crushing capacity of approximately 3,500 TCD.

While cooperative societies and government-owned entities own ~50% of India's sugar capacity, the rest is owned by the private sector

After two years of being a major net importer, India has been a net exporter since the last two seasons backed by robust sugarcane cultivation and favorable weather.

With Indian sugar season 2010-11 producing 24.2 million tonnes, India became a sugar surplus country in the 2010-11 sugarcane season. India is expected to produce 26.0 million tonnes in 2011-12 season. Having approved exports of up to 3.2 million tonnes of sugar in 2010-11, the government further announced 2.0 million tonnes of sugar exports in 2011-12 through the Open General License (“OGL”) before recently lifting the restriction on sugar exports and allotment of licenses in proportion   of the sugar production. The Government has also replaced the monthly Free Sugar Sales quota with Quarterly Free Sales Quota  system and have set up a committee under Dr. C. Rangarajan to consider decontrol of the sugar industry.

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