Puravankara (PURVA) Q4 08/09 earnings summary

Executive summary

• FY09 results weakened amid recessionary conditions: revenue fell 21% YoY and consolidated net profit fell 39.84% YoY; construction activity covered 4.41 million sq. ft. during the year.

• Development scale remained substantial, with 13.44 million sq. ft. under development and a land bank of 125.17 million sq. ft. of developable area.

Financial highlights

• Consolidated revenue was Rs. 4,449.04 million, down 21% YoY; gross profit was Rs. 1,810.14 million, down 28.72%.

• Operating profit was Rs. 1,311.51 million versus Rs. 2,074.74 million; consolidated PAT was Rs. 1,444.19 million versus Rs. 2,400.48 million.

• Cost of revenue fell 15.38% to Rs. 2,638.91 million, while general and administrative expenses rose 25.62% to Rs. 282.82 million.

• Net cash used in operating activities was Rs. 428.02 million; cash and cash equivalents closed at Rs. 267.94 million versus Rs. 349.71 million.

Outlook and guidance

• Management expected the downturn to ease, citing strong economic fundamentals, urbanisation and rising demand for homes among younger and middle-income buyers.

• Planned launches across Coimbatore, Colombo, Kochi, Bangalore and Mysore; affordable housing expansion was aimed at demand shifting from high-cost apartments to medium-cost homes.

• Growth spending on land acquisition, construction and development was expected to be funded through operating cash flows and borrowings, subject to interest rates, property prices and market conditions.