Amira Nature Foods Ltd (ANFI)

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Amira Nature Foods Inc. (ANFI)

F1Q 2014 Earnings Conference Call

August 26, 2013 16:30 pm ET

Executives

Katie Turner - Managing Director, ICR

Karan Chanana - Chairman, Chief Executive Officer

Ashish Poddar - Chief Financial Officer

Analysts

Eric Katzman - Deutsche Bank

Thilo Wrede - Jefferies & Company

Akshay Jagdale - KeyBanc

Presentation

Operator

Greetings and welcome to the Amira Nature Foods’ First Quarter 2014 Earnings Call. At this time, all participants are in a listen-only mode. Later a question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Katie Turner of ICR. Thank you, Ms. Turner, you may begin.

Katie Turner

Good afternoon everyone and welcome to Amira Nature Foods’ first quarter fiscal year 2014 earnings conference call. On the call today are Karan Chanana, Amira’s Chairman and Chief Executive Officer; Ashish Poddar, Chief Financial Officer; and (Anil Chawla), Vice President, Legal.

By now everyone should have access to the earnings release which went out today at approximately 4:00 pm Eastern time. If you have not had a chance to review the release, it’s available on the Investor Relations portion of Amira’s website at www.amirafoods.com. This call is being webcast and a replay will be available on Amira’s website.

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 the company’s public filings with the SEC and those mentioned in the earnings release.

You should note that the company’s actual results may differ materially from those projected in the statement. These are a variety of factors affecting the business, except as required by law, the company undertakes 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 earnings per share, adjusted net working capital and net debt which are non-IFRS financial measures. A reconciliation of these non-IFRS measures to the most directly comparable IFRS financial measures are included in the company’s press release issued earlier today and again that’s posted on the company’s website.

And with that, I would like to turn the call over to Karan Chanana, Chairman and CEO.

Karan Chanana

Thanks Katie, good afternoon everybody. Thank you for joining us on today’s call.

I will provide a brief overview of our financial highlights and provide you with an update on our business and growth initiative. Next Ashish will review the financial results for the quarter and discuss our guidance for fiscal year 2014. After that we will open up the call for your questions.

We are off to a great start in fiscal year 2014. We built upon the positive momentum from last fiscal year and once again delivered strong financial results reflecting growth both in India and internationally.

In the first quarter of fiscal 2014, revenue increased by 37.6% compared to the first quarter of fiscal 2013 highlighting the strong demand for our products and our successful execution of our business strategy. We also generated strong growth in EBITDA which increased 42.4% compared to the first quarter of last fiscal and this reflects our ability to leverage our operating costs across higher sales volume.

In fiscal 2014, we believe we are positioned to continue to benefit from this growing global demand for Amira’s product including our (inaudible) offering as well as our expanding portfolio of specialty rice and complementary products.

Overall, industry dynamics remain very positive which should benefit Amira in both the short and long-term. We are in the middle of our Indian rice planting season and having season’s favorable rice planting conditions in India due to increased rainfall across the many key parts of the rice growing area. It is expected that this should lead to a strong harvest this year.

According to the Ministry of Agriculture, as of July 26th of this year, India’ main summer rice crop planting area increased to approximately 19.64 million hectares, an increase of approximately 6.6% from 18.42 million hectares sown during last year’s planting season. With our leading position in the industry, Amira is positioned to benefit from the strong supply of rice.

Another macro factor that will help to drive growth for Amira is expanding the modern trade in India. We have more than doubled the number of stores with Amira’s branded presence in India over the last one year. Recently, the Indian government announced a further easing of restrictions on foreign supermarket chains to encourage them to speed up the openings of new stores and warehouse investments. This they did by eliminating the requirement of 30% of supplies to be sourced locally and relaxing related such rules. With the full impact of this policy is yet to be determined, major retailers have indicated that they are pleased with the proposed changes in policy.

Given Amira’s scale and strong existing relationship with many leading retailers, we believe, we are well-positioned to serve these retail chains, if they expand their presence in India over the next several years. In India, with the growing middle-class, we are seeing a growing demand for Amira branded rice. People are trading up to more branded rice as income’s rise and the growing of the Indian middle-class, which also brings with it growing awareness for health benefits packaged food especially packaged rice.

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