Sobha (SOBHA) Q4 11/12 earnings summary

Executive summary

• FY12 consolidated revenue was ₹14,143.72m, EBITDA ₹4,730.25m, PBT ₹3,177.08m and PAT ₹2,059.54m; fresh real estate sales exceeded guidance at 3.28m sq. ft. valued at ₹17.01bn.

• Delivered 5.22m sq. ft. during the year and surpassed 50m sq. ft. of cumulative developed area since inception.

Financial highlights

• Consolidated revenue ₹14,143.72m vs ₹13,996.13m YoY; EBITDA ₹4,730.25m vs ₹3,651.58m; PBT ₹3,177.08m vs ₹2,514.18m.

• Consolidated PAT ₹2,059.54m vs ₹1,812.92m; EPS ₹21.00 vs ₹18.49. Standalone PAT was ₹2,008.50m vs ₹1,824.60m; EPS ₹20.48 vs ₹18.61.

• Real estate sales volume 3.28m sq. ft. vs 2.78m; sales value ₹17.015bn vs ₹11.335bn; average realization ₹5,181/sq. ft. vs ₹4,082, up 27% YoY.

• Net positive operating cash flow ₹5,302.44m vs ₹4,131.32m; gross debt ₹11,257.70m and net debt ₹10,645.90m at Mar. 31, 2012.

Outlook and guidance

• FY13 planned launches total 5.86m sq. ft. of super built-up area across Bangalore, Coimbatore, Thrissur and Mysore; economic interest totals 4.30m sq. ft.

• Target debt/equity range is 0.50–0.55 in coming years; planned growth focuses on mature markets, new launches and selective land investment.

• Expected operating cash surplus of ₹36bn from ongoing real estate projects covering 16.28m sq. ft. of sold and unsold space, after construction costs.

• Management expected RBI rate reductions of 100–150 bps in FY13, anticipating improved market conditions.