GMR Airports (GMRINFRA) Q4 06/07 earnings summary

Executive summary

• FY07 marked rapid expansion across power, roads and airports; consolidated gross revenue rose 86% to Rs.1,987.05 Cr and PAT before minority interest rose to Rs.241.77 Cr from Rs.93.62 Cr.

• Airport operations became a major revenue stream with Delhi operations taken over in May 2006; Hyderabad airport construction and four road projects advanced.

• Growth was supported by a successful IPO and higher operating performance, while Vemagiri’s gas shortage caused a material loss and constrained returns.

Financial highlights

• Consolidated gross revenue increased 86% to Rs.1,987.05 Cr; net revenue rose 61% to Rs.1,715.07 Cr after Rs.271.98 Cr Delhi Airport fee to AAI.

• EBITDA increased 23% to Rs.562.01 Cr from Rs.456.37 Cr; EBITDA margin on net revenue declined to 32.77% from 42.86%.

• PBT rose to Rs.283.31 Cr from Rs.106.13 Cr; PAT before minority interest reached Rs.241.77 Cr, while net profit after minority interest was Rs.174.43 Cr versus Rs.70.56 Cr.

• EPS increased to Rs.5.56 from Rs.2.67; consolidated net profit margin on net revenue was 14.10% versus 8.79%.

• Operating cash flow was Rs.674.28 Cr; cash and bank balances were Rs.1,300.04 Cr, including restricted cash of Rs.256.54 Cr.

Outlook and guidance

• Hyderabad airport was expected to begin commercial operations in early 2008; Delhi development phase 1A was scheduled for 2008 and phase 1B for 2010.

• Four road projects under construction were targeted for operation from mid-2008 through end-2008; implementation progress was described as satisfactory.

• New power pipeline included 1,000 MW coal projects in Odisha and Chhattisgarh, 160 MW Talong hydro and 140 MW Alaknanda hydro; Odisha project commissioning was expected by mid-2011.

• Natural gas supply to Vemagiri was expected to stabilize by 2008; Mangalore’s seven-year PPA was due to expire during 2008, with a post-PPA strategy under evaluation.

• NHAI planned to offer 6,273 km of roads for BOT development in FY08, supporting further bidding opportunities.