Q2 FY11 Analyst Presentation
10
th
Nov 2010
Q2 FY11 Analyst Presentation
Q2 FY11 Analyst Presentation
10
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.
Q2 FY 11 …….. update
The year 2010 started on an optimistic note with a gradually stabilizing global economy. Robust economic growth,
measured polic y 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
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 22.05 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- 1.32 msf handed over during the Qtr in the offices segment
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
2520
2161
17%
2520
1810
39%
EBIDTA ( Core Operations )
1153
1164
-1%
1153
1020
13%
EBIDTA ( Consolidated )
1080
1112
-3%
1080
973
11%
Consolidated P&L – Q2 FY11
Above figures includes losses from non-core businesses .i.e. Hotels & the DLF Pramerica Life Insurance businesses
Sl.No. Consolidated Financ ials Rs. Crs. Percentage of
Tota l Revenue Rs. Crs.
Pe rc entage of
Total Reve nue Rs. Crs.
Percentage of Tota l Revenue Rs. Crs . Perce ntage of Total Revenue A)
1 Sales and Other Rec eipts 2,369 1,751 2,029 4,398 2 Other Inc ome 151 59 132 283
Total Inc ome(A1 +A2) 2,520 100% 1,810 100% 2,161 100% 4,681 100%
B) Total Expenditure(B1+B2+ B3) 1,440 57 837 46 1,049 49 2,489 53 1 Construction Cost 1,014 40 515 28 734 34 1,748 37 2 Sta ff cos t 162 6 108 6 129 6 291 6 3 Othe r Expe nditure 264 10 214 12 186 9 450 10
C) Gross Profit Margin(%) 60% 72% 66% 63%
D) EBITDA (D/A1) 1,080 43 973 54 1,112 51 2,192 47
E) EBIDTA ( Margin) 42% 53% 51% 46%
F) Financ ial charge s ( Gross ) 434 17 249 14 388 18 822 18 G) Deprec iation 154 6 76 4 150 7 304 6
H) Profit/loss before taxes 492 20 648 36 574 27 1,066 23 I) Taxe s ex pens e 73 3 191 11 168 8 241 J) Prior period ex pens e/(inc ome) (net) (6) 0 5 0 (3) 0 (9) K) Net Profit after Taxes before Minority Interes t 425 17 452 25 409 19 834 18
L) Minority Interes t (7) 0 (12) -1 (3) 0 (10) M) Profit/(losss) of Ass ociate s (0) 0 0 0 5 0 5
N) Net Profit 418 17 440 24 4 11 19 829 18
1
2
Half year FY 11 Q2 FY11 (reviewed) Q2 FY10 (review ed) Q1 FY11 (reviewed)
Constr uction Cost Includes Cost of Land, Plo ts and Co nstr ucted Pro per ties an d Cos t of Reve nue-o ther s
Gro ss Pro fit M ar gin = (T otal Incom e - Con str ucti on Co st) / Total In com e Note :
Consolidated Balance Sheet – Q2 FY11
Sche dule 30-Se p-10 30-Se p-09 30-Jun-10 31-Ma r-10
(Re vie w ed) (Una udited) (Una udited) (Audite d)
Sha re holde rs' funds
1 2,423 1,735 3,361 6,259 Res erves and s urplus 2 24,232 23,269 23,736 24,173
26,656
25,005 27,096 30,433
Minority Interes ts 602 629 653 628
Loa n funds
Sec ured loans 3 20,810 13,297 20,946 19,302 Uns ec ured loans 4 2,428 1,431 2,428 2,375 5 - - 297 251
50,496
40,362 51,421 52,989
Fix e d asse ts 6
Gros s bloc k 18,502 8,700 18,197 17,884 Less : Deprec iation 1,630 725 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 1,277 2,018 1,258 1,268 5 77 79 - -8 14,397 11,392 13,096 12,481 Sundry debtors 9 1,918 1,567 1,438 1,619 Cas h and bank balances 10 1,556 634 1,297 928 Loans and advanc es 11 7,548 8,306 7,364 7,593 Other Current As sets 12 4,734 7,306 4,768 4,685
30,152
29,204 27,963 27,306
APPLICATION OF FUNDS
Goodwill on cons olidation
Cur rent a ssets, loa ns a nd a dva nce s
Stoc ks
Deferred Tax As sets
Pa rticular s
As a t
SOURCES OF FUNDS Capital
Consolidated Cash Flow – Q2 FY11
For
Q2
30-Sep-10
30-Jun-10
31-Mar-10
30-Sep-09
A. Cash flow from operating activities:
Net profit before tax 492 1,065 573 2,505 1,123
Adjustments for:
Depreciation 154 304 150 325 152
Loss/(profit) on sale of fixed assets, net 11 12 1 (58)
-Provision for doubtful debts/unclaimed balances written back and others 22 19 (3) 82 46
Loss/(profit) on sale of current Investments (74) (86) (12) (9) 1
Amortisation cost of Employee Stock Option 15 30 15 42 24
Interest/gurantee expense 433 822 389 1,110 536
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 84 455 371 764 (1,231) Taxes paid (177) (444) (267) (856) (184)
Net cash (used in) / from operating activities 825 1,472 647 8,628 2,368 B. Cash flow from investing activities: -Sale/Purchases of fixed assets(net) (8) (180) (172) (13,324) (556)
Interest/Dividend received 22 144 122 127 86
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) 125 18 (107) (644) (393)
Interest paid (630) (1,180) (550) (2,104) (845)
Dividend Paid (54) (260) (206) (383) (1)
Increase in share capital 14 14 - (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 258 601 342 (261) (518)
Opening cash and cash equivalents - 835 835 1,096 1,096 Closing cash and cash equivalents 258 1,436 1,178 835 578
Net Increase / (decrease) 258 601 342 (261) (518)
Difference
Particulars
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.
Debt Position – Q2 FY11
All figures in Rs. Crs
Debt
Pref Cap.
Consol.
Gross Opening Bal ( as on 1
st
July-10 )
23375
1643
25,018
Less / Add : Repaid during Q2-11
(2,229)
(2229)
: New loan availed
2,033
2033
: Repayment of Pref. Shares
(1169)
(1169)
: Debt Increase due to Consolidation
60
60
Gross Debt position ( as on 30
th
Sept-10 )
23239
474
23,713
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.2010-11
2890
Less : Paid till 30
th
Sep-10
1224
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 - 0.75x
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
Divestments Plans of Non-core assets / businesses
Since, the start against medium term target of Rs. 5500 Crs achieved Rs. 2507 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