Mall rentals, consumption push Phoenix Mills' consolidated Q1 PAT up by 40%

Q1 retail rental income up by 15% at Rs 2.4 billion; mixed performance in hotel vertical

Growing retail rental income across its malls, coupled with rise in consumption, has led to retail mall developer and operator, The Phoenix Mills Limited (PML), posting a 40 per cent jump in its consolidated profit after tax (PAT) for the first quarter ended June 30 of the financial year 2018-19. 

In its unaudited financial results for Q1 of FY19, PML has seen a jump from Rs 425.84 million PAT in Q1 of previous fiscal 2017-18 to Rs 597.3 million this year. One of the largest retail-led mixed-use asset developers and operators, PML has also seen revenue from operations grow by four per cent year-on-year (Y-o-Y) to close at Rs 4.13 billion for Q1 of FY'19, up from Rs 3.96 billion for the said quarter last year.

PML's retail business, which contributed 70 per cent to its Q1 FY19 consolidated revenue saw aggregate retail rental income post a healthy growth of 15 per cent in the first quarter of fiscal 2018-19 to stand at Rs 2.4 billion. Aggregate consumption across its malls also grew by five per cent to Rs 17 billion.

With PML closing four acquisitions -- land parcels in Bengaluru and Ahmedabad and under-construction retail assets in Lucknow and Indore -- between April and July 2018, along with the Wakad, Pune property, acquired last year its under-development retail leasable portfolio has now touched 4.6 million square feet (msf).

"The hotel portfolio did quite well in what is usually a seasonally weak quarter for the industry, due to very low inbound tourist traffic. With five acquisitions during the past 14 months, comprising a combination of land parcels and under-construction assets, we demonstrated our resolve to achieve the target of doubling the retail portfolio in the next 4-5 years," said Shishir Shrivastava, Joint Managing Director, The Phoenix Mills Limited.

Hospitality, PML's second-largest business contributing 19 per cent of consolidated revenue in Q1, too posted a decent growth amid industry challenges such as low inbound traffic. Among its hospitality properties, while St Regis, Mumbai saw average room rate increase by five per cent to Rs 11,295, that for Courtyard by Marriott, Agra grew by a marginal 2.8 per cent to Rs 3,181. Occupancy rates too saw mixed results for PML with St Regis posting a two-percentage-point growth to 74 per cent in Q1 of FY19 from the same period last year while Courtyard by Marriott, Agra fell from 51 per cent to 47 per cent this year.

According to Pradumna Kanodia, Director-Finance, The Phoenix Mills Limited, the financial performance during the quarter was driven by the company's retail and commercial portfolios which helped PML post an 11 per cent y-o-y growth in EBITDA and an impressive 40 per cent y-o-y growth in profit after tax. 

"This is helping us generate superior cash flows which we are prudently deploying for our growth initiatives, resulting in much lesser additional debt relative to our deployment. Improvement in credit ratings across our SPVs is a testimony to the company’s conservative and prudent fiscal discipline," said Kanodia.

Both commercial and residential businesses of PML contributed four per cent each to its consolidated Q1 FY19 revenue.