Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net revenue for Q1 FY25 increased to INR186 crore from INR162 crore in Q4 FY24.
- EBITDA margin improved to 6% year-on-year and quarter-on-quarter.
- Profit after tax grew 4% year-on-year from a loss of INR4 million quarter-on-quarter.
- Shrimp volumes sold increased to 2,571 metric tons in Q1 FY25 from 2,302 metric tons in Q4 FY24.
- The share of the EU in the overall sales mix increased to 39% in Q1 FY25 from 18% in Q1 FY24, indicating a more diversified sales mix.
Negative Points
- Net revenue decreased from INR254 crore in Q1 FY24 to INR186 crore in Q1 FY25.
- The US market demand remains weak, compounded by countervailing duties and geopolitical tensions.
- Increased freight costs and extended shipping times due to logistical challenges.
- Pending regulatory approvals for high value-added ready-to-eat products in the EU market.
- Farm gate prices have increased significantly due to supply constraints, impacting margins.
Q & A Highlights
Q: Could you give a breakup of the total quantity for this quarter?
A: For this quarter, the ready-to-eat sales were 222 metric tons, which is around 9% of the total sales.
Q: What could be the impact of logistical challenges on the EBITDA margin?
A: Global logistical challenges have increased our freight costs due to the lack of availability of equipment. Ocean freight costs have gone up by 60% to 70%, and the sailing period has increased by 10 days, affecting our cash cycle.
Q: Is it possible to increase the ready-to-cook share in new geographies without EU approval?
A: We are optimistic about improving sales in Canada and are awaiting EU approvals. We are also exploring markets in Asia and Central America.
Q: What is the current trend in pricing for this quarter?
A: Realization prices have improved, but global inflationary pressures and recessionary fears limit significant price increases. Farm gate prices have also improved due to supply constraints.
Q: Has the new state government addressed the electricity rate concerns for primary producers?
A: The new government is working on it, and benefits are expected to be passed on to all aquaculture businesses soon.
Q: Are you looking to take advantage of central government schemes for the broodstock multiplication center business?
A: We are focusing on increasing and improving our primary production and hatchery operations. We are also considering using technology to enhance production.
Q: Can we expect demand from the US to improve further?
A: Demand has started to improve, driven by holiday sales. However, global recessionary fears and inflationary pressures remain concerns.
Q: What is the situation in the US in terms of demand for ready-to-eat and ready-to-cook products?
A: Demand has been good, especially for the upcoming holidays. Customers are placing orders for November, December, and January.
Q: What are the margins in the ready-to-eat segment?
A: Typically, the ready-to-eat segment has margins of around $0.50 to $0.75 per kilo over and above the ready-to-cook segment.
Q: How is competition from Ecuador affecting you?
A: Ecuador's proximity to the US market gives them an advantage, but they face capacity constraints in producing value-added products. The new countervailing and antidumping duties will create a more level playing field.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
