Conference Call with SH Kelkar Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen in to the full transcript.
Call Participants: Mr. Kedar Vaze - Whole Time Director & CEO, B Ramkrishnan - Head Strategy, Shrikant Mate - Executive Vice President & Group CFO
Introductory Remarks from Kedar Vaze
Good morning everyone and thank you for joining us on our earnings conference call to discuss the operating and financial results for the fourth quarter and full year ended March 2020. I will be covering the quarterly business highlights financial performance for the quarter post which we will open the forum for your questions and suggestions.
We began the fourth quarter on an encouraging note, witnessing increased demand and improved traction in terms of order enquiries and leads, especially from the mid and large sized FMCG customers. This led to a solid pick up in our business momentum in the months of January and February. However, a country-wide lockdown and restrictions in the last 10 days of March changed our operating trajectory and moderated our sales during the quarter. On a consolidated basis, our revenue from operations is steady at Rs 269.8 crore in Q4FY20 and for the year FY20, it was Rs 1,105 crore, higher by 6% YoY.
The company saw several operational challenges due to Covid-19 led lockdown in March and April. While we did not witness any significant impact on existing orders from the customers, our execution during the quarter was severely impacted due to plant closures and logistics issues. As per our assessment, the revenue impact owing to the lockdown in the last 10 days of March roughly translates to around Rs 30 crore of revenue. Adjusted for the same, we believe we would have been largely on track to deliver our performance as per our internal expectations for the quarter.
In this challenging environment, gross margin during the quarter improved by 44% and for the full year to 43% while before that the quarter stood at Rs 12 crores. Adjusted for the impact of Covid, our revenue and EBITDA would have registered around that of Rs 22 crore as per our assessment. Cash profit for the year stood at strong Rs 122.7 crore and would have been roughly Rs 10 crores higher without the Covid disruption. In the fragrance division, we are currently witnessing good demand and a healthy build up of order pipeline of categories such as household products, detergents, sanitizers, soap and personal wash, higher than the average of the previous year.
Our latest category addition, industrial fragrance is also tracking healthy progress. We reported increased contribution of industrial fragrance in Q4 and full year 2020. The new products that we have introduced in the market have been well received and we expect to deliver improving contributions from this division in the years to come. Our flavour business also reported steady performance during Q4 and full year 2020 taking into account the impact of Covid-19 on this segment. I would also like to update you on the encouraging performance reported by CFF, our Italian joint venture. Despite a challenging operating environment in Europe during the January March quarter, revenues from the core fragrance division improved by 13.5% YoY. Gross margins in the core Fragrance segment stood at 54.7%, higher by 580 bps YoY. Lower raw material prices during the period resulted in healthy profitability margins.
I am also happy to share that despite the lockdown in Italy, CFF witnessed steady sales in the month of April 2020 and also in March. Going forward, we expect to deliver healthy performance in the quarters ahead. Let me now discuss Covid-19 pandemic and its impact on our company’s operations. From January 2020, the outset of this pandemic has been disruptive in global economies and markets. As discussed in our previous earning call, we did not see any major impact on our raw materials owing to supply chains in China. However, the nationwide lockdown in domestic markets from March 22 to May 17 significantly affected our business activities.
Our priority during this challenging operating environment is to maintain secure operations while also ensuring safety and well being of our employees and business partners. Further, we were focussed in serving all our customers especially since we formed an important part of the FMCG supply chain. On the operational front, we took all precautionary measures across our business operations in temporary closed operations with our corporate office in Mumbai and implemented work from home. In line with the government directives, we had also temporarily suspended manufacturing operations across all our manufacturing facilities in India for roughly 35 odd days.
The company faced supply chain disruptions and labour management issues during the lockdown in March and April. Situation is certainly improving now. Following the government’s requisite approvals, we have resumed our operations in the facilities from April 27 onwards. While the units are operating at low utilizing leves, we are undertaking all precautionary measures and ensuring highest safety standards across all manufacturing sites. I am happy to share that our contribution for business from existing and new customers stood at around 5% during the FY20. Fundamentally, the company continues to be strong and stable.