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Amira Nature Foods (ANFI)
Q3 2013 Earnings Call
February 25, 2013 8:30 am ET
Karan Chanana – Chairman, Chief Executive Officer
Ashish Poddar – Chief Financial Officer
Rahul Nayar – Director, Global Communications and Strategy
Thilo Wrede – Jefferies & Co.
Gautam Chhaochharia – UBS
Akshay Jagdale – Keybanc
Eric Katzman – Deutsche Bank
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It is now my pleasure to introduce your host, Rahul Nayar. Please begin, sir.
Good morning everyone and welcome to Amira Natural Foods Third Quarter Fiscal 2013 conference call. On the call today are Karan Chanana, Amira’s Chairman and Chief Executive Officer; Ashish Poddar, Chief Financial Officer; and Anil Chawla (ph), Vice President, Legal.
By now everyone should have had access to the third quarter fiscal 2013 earnings release which went out today at approximately 7:00 am Eastern time. If you have not had a chance to review the release, it’s available on the Investor Relations portion of our website at www.amirafoods.com. This call is being webcast and the replay will be available on the Amira website as well at amirafoods.com.
Before we begin, we would like to remind everyone that prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the company’s control that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks detailed in our public filings with the Securities and Exchange Commission and those mentioned in the earnings release. Except as required by law, we undertake no obligation to update any forward-looking or other statements herein whether as a result of new information, future events, or otherwise.
Also in the company’s earnings release and in today’s prepared remarks, we include EBITDA, adjusted profit after tax, and adjusted earnings per share which are non-IFRS financial measures. A reconciliation of these non-IFRS measures to the most directly comparable IFRS financial measures is included in the company’s press release issued earlier today, which has been posted on our website.
And with that, I would like to turn the call over to Karan Chanana, Chairman and CEO.
Thanks Rahul. Good morning everybody and thank you for joining us. As most of you know, this is our second conference call as a public company and we are very excited to share our results with you today. I have had the pleasure of discussing our story with many of you over the past few months and before we get too far into our third quarter results, I would like to thank you for your interest and investment in Amira Nature Foods.
On today’s call, I will provide a brief overview of our third quarter financial highlights and provide you with an update of our strategic growth initiatives, then Ashish will review the financial results for the quarter in more detail and provide guidance for the full fiscal year 2013. After that, we will open up the call for your questions.
We are very pleased with our third quarter financial 2013 results. In the quarter, we continued to execute on our strategic initiatives as we experienced further growth in India and internationally. Revenue for the third quarter fiscal 2013 increased 56.2% to $113.9 million. The revenue increase was primarily due to increased sales volumes both in India and internationally. Our third quarter revenue included 23.6 million associated with shipment of product to a repeat customer, as previously disclosed, while the comparable shipment to this customer was made in the fourth quarter of the fiscal 2012. Excluding this shipment, revenue for the third quarter of fiscal 2013 would have increased 23.8% to approximately $90.3 million.
For those of you new to our story, the core product of our business is Indian specialty rice, particularly basmati which is a differentiated premium segment of rice. Worldwide, rice is a staple of many people’s diets and especially popular in high growth emerging markets. Our superior supply chain and manufacturing capabilities have enabled Amira to position itself as one of the leaders in this grain industry. The barriers to entry in rice processing and packaging are very high as it is a highly technical and delicate process. In addition to our core basmati offerings, we have recently launched value-added innovative products in rice and adjacent categories, including a ready-to-eat category in which we created dry snacks to capitalize on the expanding snack market in India. With our strong product offerings and diverse business model, we have laid the foundation for our future growth.
As we look ahead, we will continue to execute on our six distinct growth strategies: first, accelerate global brand building and value-added product offerings. We are continuing to evaluate market gaps for new products and future innovation in complementary categories. Second, strengthen our distribution for strength in India. As you know, India has a rapidly growing middle class and demonstrates very attractive demographic trends. We are focused on strengthening our diet distribution in key locations as well as expanding our network of distributors while also capturing the significant growth opportunities presented by increase in the India modern trade. We have opened one company-managed distribution center. Going forward, we plan to open additional company-managed distribution centers in 14 major cities in India over the next three years, which we expect will result in greater market penetration and higher margins.