DLF (DLF) Q4 09/10 earnings summary

Executive summary

• FY10 consolidated revenue fell 24.73% YoY to Rs. 7,851 crore; PAT after minority interest fell 59.41% to Rs. 1,814 crore amid weak commercial sales and higher finance charges.

• Strategy emphasized consolidation, execution, risk management, non-core asset exits and a separate rental business to support stable cash flows.

Financial highlights

• Consolidated EBITDA was Rs. 3,940 crore, down 34.19% YoY; PAT after prior-period items was Rs. 1,720 crore, down 62%, and EPS was Rs. 10.13 vs. Rs. 26.24.

• EBITDA margin was 50% vs. 57%; excluding DAL sales, margins were comparable with FY09. Finance charges rose to Rs. 1,110 crore from Rs. 555 crore.

• Standalone turnover was Rs. 3,220 crore vs. Rs. 3,839 crore; standalone PAT was Rs. 767 crore vs. Rs. 1,550 crore, with EPS of Rs. 4.51 vs. Rs. 9.09.

• Consolidated rental income increased to Rs. 725 crore from Rs. 505 crore, supported by delivery of pre-leased commercial properties.

Outlook and guidance

• FY11 residential sales expected primarily from existing inventory and later phases of launched projects; launches to be selective, based on approvals, pricing, costs and design.

• Office leasing target was 3–4 m.s.f. in FY11; Q1 FY11 leasing reached 0.93 m.s.f., exceeding the full FY10 total of 0.7 m.s.f.

• Rental assets and leasing growth remain priorities for stable cash flows; margin protection is emphasized amid inflation-driven input cost and interest-rate risks.