Q2 FY11 Analyst Presentation. 10 th Nov 2010

Transcription

1 Q2 FY11 Analyst Presentation 10 th Nov

2 SAFE HARBOUR This presentation contains certain forward looking statements concerning DLF s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulation etc., interest and other fiscal cost generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time on behalf of the company. 2

3 Q2 FY 11.. update The year 2010 started on an optimistic note with a gradually stabilizing global economy. Robust economic growth, measured policy actions and global liquidity flows continue to provide strong visibility for the India growth story through H1 FY 11. Real estate market remains healthy across all segments with capital Flows to the sector also witnessing an increase i.e. IPO s / PE deals etc Homes Volumes sustaining despite price increases across most locations as consumers regained confidence Capital values witnessed an increase across high end and mid range segments esp. in city center locations Offices Commercial office market witnessing growth Stable rental values & reducing inventory levels PAN India augur well for further growth in the segment Retail Mall rentals remained stable over the last quarter across most micro markets Increased traction by prospective tenants, existing & new, as consumer spend increases Industry Outlook - H211 Pricing discipline keeping in view the absorption capacity, important to sustain ongoing growth Launch momentum to be more visible in H2 FY 11 Further policy action on interest rates / provisioning front could become a concern Commodity / Labour price increases may impact input cost / margins 3

4 Performance of Company Q2 FY11 Dev Co: 2.08 msf gross sales booked vs 1.9 msf in Q1 11. In Q2 10, the sales booking amounted to 2.74 msf Phase V 0.50 msf Panchkula, Chandigarh 0.51 msf New Gurgaon, OMR Chennai, Begur Bangalore, MICO Chennai homes and commercial complexes 1.07 msf Rent Co : 1.56 msf of leasing vs 0.98 msf in Q1 11. In Q2 10 leasing was at ( 0.44 ) msf. Total achieved > 2.54 msf during H1 11 The commercial office market witnessing signs of stability & growth Rentals across most locations stable. Cumulative leasing as on date stands at msf. New lease rentals still off peak 08 levels. Divestment of non-core assets - Rs. 413 Crs in the quarter. Total achieved for H1 11 Rs. 707 Crs 3.22 msf new construction started during the Qtr in Offices and Homes. Cumulative construction stands at 57 msf Delivery msf handed over during the Qtr in the offices segment 4

5 Profit & Loss Summary Q2 FY11 Q2 FY 11 vs Q1 FY 11 Sales(incl Other Income) at Rs 2520 Cr, compared to Rs 2161 Cr. Net profit at Rs 418 Cr, as against Rs 411 Cr EBIDTA margins at 42% versus 51% Profitability All figures in Rs. Crs Particulars Q2 11 Q1 11 Change Q2 11 Q2 10 Change Sales % % EBIDTA ( Core Operations ) % % EBIDTA ( Consolidated ) % % % PBT ( Consolidated ) % % PAT % % 5

6 Consolidated P&L Q2 FY11 Sl.No. Consolidated Financials Rs. Crs. Q2 FY11 (reviewed) Percentage of Total Revenue Q2 FY10 (review ed) Rs. Crs. Percentage of Total Revenue Q1 FY11 (reviewed) Rs. Crs. Percentage of Total Revenue A) 1 Sales and Other Receipts 2,369 1,751 2,029 4,398 2 Other Income Half year FY 11 Percentage Rs. Crs. of Total Revenue Total Income(A1+A2) 2, % 1, % 2, % 4, % B) Total Expenditure(B1+B2+B3) 1, , , Construction Cost 1, , Staff cost Other Expenditure C) Gross Profit Margin(%) 60% 72% 66% 63% D) EBITDA (D/A1) 1, , , E) EBIDTA ( Margin) 42% 53% 51% 46% F) Financial charges ( Gross ) G) Depreciation H) Profit/loss before taxes , I) Taxes expense J) Prior period expense/(income) (net) (6) (3) 0 (9) K) Net Profit after Taxes before Minority Interest L) Minority Interest (7) 0 (12) -1 (3) 0 (10) M) Profit/(losss) of Associates (0) N) Net Profit Note : 1 2 Construction Cost Includes Cost of Land, Plots and Constructed Properties and Cos t of Reve nue-others Gross Profit Margin = (Total Income - Construction Cost) / Total Incom e Above figures includes losses from non-core businesses.i.e. Hotels & the DLF Pramerica Life Insurance businesses 6

7 Consolidated Balance Sheet Q2 FY11 Particulars As at Schedule 30-Sep Sep Jun Mar-10 (Review ed) (Unaudited) (Unaudited) (Audited) SOURCES OF FUNDS Shareholders' funds Capital 1 2,423 1,735 3,361 6,259 Reserves and surplus 2 24,232 23,269 23,736 24,173 26,656 25,005 27,096 30,433 Minority Interests Loan funds Secured loans 3 20,810 13,297 20,946 19,302 Unsecured loans 4 2,428 1,431 2,428 2,375 Deferred tax liabilities (net) ,496 40,362 51,421 52,989 APPLICATION OF FUNDS Fixed assets 6 Gross block 18,502 8,700 18,197 17,884 Less: Depreciation 1, ,472 1,325 Net block 16,872 7,975 16,725 16,558 Capital work in progress 9,351 6,374 11,079 11,129 Investments 7 1,682 1,542 3,006 5,505 Goodwill on consolidation Deferred Tax Assets 1,277 2,018 1,258 1, Current assets, loans and advances Stocks 8 14,397 11,392 13,096 12,481 Sundry debtors 9 1,918 1,567 1,438 1,619 Cash and bank balances 10 1, , Loans and advances 11 7,548 8,306 7,364 7,593 Other Current Assets 12 4,734 7,306 4,768 4,685 30,152 29,204 27,963 27,306 Less : Current liabilities and provisions Liabilities 13 5,162 3,008 5,059 4,637 Provisions 14 3,752 3,823 3,552 4,140 8,915 6,831 8,611 8,777 Net current assets 21,238 22,374 19,353 18,529 50,496 40,362 51,421 52,989 7

8 Consolidated Cash Flow Q2 FY11 For Period ended Particulars Q2 30-Sep Jun Mar Sep-09 A. Cash flow from operating activities: Net profit before tax 492 1, ,505 1,123 Adjustments for: Depreciation Loss/(profit) on sale of fixed assets, net (58) - Provision for doubtful debts/unclaimed balances written back and others (3) Loss/(profit) on sale of current Investments (74) (86) (12) (9) 1 Amortisation cost of Employee Stock Option Interest/gurantee expense , Interest/dividend income (75) (172) (97) (256) (125) - Operating profit before working capital changes 978 1,994 1,016 3,741 1,757 Adjustments for: - Trade and other receivables (326) (410) (84) 5,892 2,302 Inventories 266 (123) (389) (913) (276) Trade and other payables (1,231) Taxes paid (177) (444) (267) (856) (184) - Net cash (used in) / from operating activities 825 1, ,628 2,368 - B. Cash flow from investing activities: - Sale/Purchases of fixed assets(net) (8) (180) (172) (13,324) (556) Interest/Dividend received Sale/Purchases of Investment(net) 1,364 3,913 2,549 (3,109) 48 Net cash used in investing activities 1,378 3,877 2,499 (16,306) (422) C. Cash flow from financing activities: - Proceeds/(repayment) from long term borrowings (net) (255) 1,547 1,802 6,025 (1,223) Proceeds from issuance of prefernce shares (1,145) (4,887) (3,742) 4,524 - Proceeds of short term borrowings (net) (107) (644) (393) Interest paid (630) (1,180) (550) (2,104) (845) Dividend Paid (54) (260) (206) (383) (1) Increase in share capital (1) (1) Net cash used in financing activities (1,945) (4,748) (2,803) 7,417 (2,463) Net increase / (decrease) in cash and cash equivalents (261) (518) - Opening cash and cash equivalents ,096 1,096 Closing cash and cash equivalents 258 1,436 1, Net Increase / (decrease) (261) (518) Difference 8

9 Cashflow Statement Summary Net Investable surplus during Q2 FY 11 is Rs 516 Crs Cashflow to strengthen further with the scale up of execution & new launches (plotted developments and high end projects.i.e. Mumbai, Cochin, Gurgaon,etc) Cost efficiencies planned last year beginning to see results on overheads, but increase in input prices beginning to impact Projected net cashflow from operations & recoveries expected to be between Rs. 750 to 1000 Crs per Qtr. 9

10 Debt Position Q2 FY11 All figures in Rs. Crs Debt Pref Cap. Consol. Gross Opening Bal ( as on 1 st July-10 ) ,018 Less / Add : Repaid during Q2-11 (2,229) (2229) : New loan availed 2, : Repayment of Pref. Shares (1169) (1169) : Debt Increase due to Consolidation Gross Debt position ( as on 30 th Sept-10 ) ,713 Less : Cash in hand 2,404 : Equity shown as Debt / JV Co. Debt 1,396 Net Debt ( as on 30 th Sept-10 ) 19,913 Net Debt ( as on 30 th June-10 ) 20,107 DEBT REPAYMENT ACTION PLAN Mandatory Debt Repayment in f.y Less : Paid till 30 th Sep

11 Debt De-Leveraging Plan Continued Focus on de-leveraging continues with monies from operational cash flows & non core asset divestments On target with divestment plans of non core assets / businesses over the medium term Slew of launches in H2 11 to substantially improve cashflow from Operations Increased percentage of construction to further add momentum to cashflows Reduction in Cost of Debt Average cost of debt at 10.5% Sept 2010 Current net debt/equity ratio: 0.73 Continue to target net debt equity of 0.5x versus a peak range of 0.65x x On-going Strategy Continue to use all free cash flows to reduce debt on an accelerated basis Keep improving the tenure and quality of debt Explore possibilities for further reduction of cost of debt 11

12 Divestments Plans of Non-core assets / businesses Since, the start against medium term target of Rs Crs achieved Rs Crs in 18 months Achieved in H1 FY11 Rs. 707 Crs Divestment of the non core retail brands business Non core / non strategic land sales in select cities Total expected to be garnered over next months approx. Rs Cr Proceeds from further land bank rationalization Refunds from state government authorities 12

13 Business Operations 13

14 Execution Capability Area in msf Region Q2 11 Q1 11 Q2 10 Gurgaon Super Metro Rest of India For Rent Co Handed over 1.32 msf of office space Added 3.22 msf of Homes & office space 14

15 Dev Co. Homes Q2-FY 11 witnessed sales booking of 2.08 msf, comprising 1.57 msf of existing stock & 0.51 msf of new sales from new launches in Panchkula and Shimla New launches in H1 low as approvals are awaited Launch of plotted development in Gurgaon in Nov-2010 Expected launches in H211 On track to meet planned sales of > 12 msf in 2011 Mumbai NTC mills project expected launch once all approvals are in place Plotted development Launches of 4-5 msf planned in Gurgaon & Chandigarh Premium project launches and plotted development to provide impetus to margins and cashflows 15

16 Dev CO. Particulars Total Mn sqft Q2-11 Q2-10 Q1-11 Sales Status Opening Balance Add:- Sale Booked During the Qty Less : Handed over Closing Balance Under Construction Opening Balance New Launches / Additions Less:- Handed over Closing Balance Wt. Avg. Sale Rate Homes (in Rs.sqft ) C.Complexes (in Rs.sqft ) Wt. Avg. Project Cost Homes (in Rs.sqft ) C.Complexes (in Rs.sqft )

17 Rent Co. Offices Total Lease portfolio of msf Q2 11 Rs. 266 Crs & H Rs 521 Crs of rental income Strong momentum in leasing 1.56 msf done during Q2 and 2.54 msf done in H Initial target for FY 11 was at 3-4 msf Average rentals across locations at Rs.43 psf pm for current leasing done rentals stabilizing across micro markets ( e.g. Gurgaon current leasing at Rs 55 psf pm). On track to meet the guidance of 3-4 msf for FY 11 Robust macro environment & enhanced expectations to have positive impact on demand 17

18 Rent Co. Retail Malls Total Lease portfolio of 1.29 msf Q2 11 Rs. 48 Crs & H Rs 88 Crs of rental income Mall rentals remained stable over the last quarter across most micro markets With rising consumers spending retailers showing visible signs of business confidence to further expand operations Enquiries by prospective / existing tenants increasing on QoQ basis, however leasing uptake across main streets and malls is expected to be limited in the near term FDI multi brand retail policy can be an upside for this segment 18

19 RENT CO. Particulars Total Mn sqft Q2-11 Q2-10 Q1-11 Lease Status Opening Balance Add:- Lease Booked During the Qty Less :- Cancellation / Adjustment (0.33) (0.53) (0.18) Closing Balance Under Construction Opening Balance New Launches / Additions Less:- Handed over Less :- Suspension/Adju Closing Balance Wt. Avg. Leasing Rate Office Building (in Rs.sqft ) Retail Building (in Rs.sqft ) Wt. Avg. Project Cost Office Building (in Rs.sqft ) Retail Building (in Rs.sqft )

20 Our Land Resources Area ( msf ) Other Land Hotel Land G.Total Gross Area as on 1 st July Less : Projects Disposed off ( Net ) Net Land Bank - as on 30 th Sept Cost ( Rs \ Crs ) Total Payable as on 30 th Sept Amt payable includes Rs.1533 crs outstanding towards HSIIDC New Golf Course land payable over 13 half yearly Installments. Break up of 406 msf of Land Resources available Particulars Dev. Co Rent. Co Hotel Total Break up Project Under Construction Notes 1. High potential & short / medium development potential not affected by above actions. 2. Project disposed off relate to Non core non strategic land Parcels across various locations and amount recovered thereof is part & parcel of recovery during Q

21 Going Forward Maintain EBIDTA at stable levels in the near term with further strengthening of cash flows. However, increased commodity prices may have an adverse impact in the medium term Increase pace of launches in ensuing quarters while ensuring appropriate pricing and demand parameters Focus on launches across all segments including plotted development in the residential vertical, after receiving all approvals in place Focus on non-core asset divestment to continue leading to rationalization of our core real estate portfolio Continue to focus on the Balance Sheet through debt reduction and improving the quality of the debt portfolio Given stable cash flows, Company is comfortable with a debt equity of 0.75x target for FY 11 between 0.4x -0.5x 21

22 EXECUTION UPDATE DELHI PROJECTS 22

23 CAPITAL GREENS ~ NEW DELHI CAPITAL GREENS PHASE I, NEW DELHI OKHLA COMMERCIAL COMPLEX SIEL COMMERCIAL COMPLEX, NEW DELHI SIEL COMMERCIAL COMPLEX 23

24 MLCP PROJECTS ~ NEW DELHI SNM MLCP, New Delhi BKS MLCP, New Delhi 24

25 EXECUTION UPDATE PHASE V PROJECTS 25

26 PHASE V- DLF CITY, GURGAON Park Place DLF Phase V, Gurgaon Magnolias DLF Phase V, Gugaon Belaire DLF Phase V, Gurgaon Star Tower - Gurgaon 26

27 EXECUTION UPDATE NEW GURGAON PROJECTS 27

28 NEW TOWN HEIGHTS NEW GURGAON NTH Sector 91, New Gurgaon NTH Sector 86, New Gurgaon NTH - Sector 90, New Gurgaon NTH Sector -90, New Gurgaon 28

29 EXPRESS GREENS & CORPORATE GREENS NEW GURGAON EXPRESS GREENS M1A, NEW GURGAON CORPORATE GREEN SECTOR -74A, NEW GURGAON 29

30 EXECUTION UPDATE REST OF INDIA PROJECTS 30

31 REST OF INDIA PROJECTS BEGUR BANGLORE DLF GARDEN CITY INDORE MALL OF INDIA - NOIDA KAKANAD HOMES 31

32 REST OF INDIA PROJECTS GARDEN CITY, OMR CHENNAI HOMES DLF RIVER SIDE, VYTILLA KOCHI - HOMES 32

33 Thank You 33