Kenya deals are in, realisation on the anvil: Delta Corp

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Kenya deals are in, realisation on the anvil: Delta Corp

Hardik Dhebar, group chief financial officer, Delta Corp joins CNBC-TV18 to speak beyond the quarterly numbers posted by the company and highlight the way forward.

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The stock of Delta Corp has tanked nearly 6.5% post its Q2 results. The company reported a consolidated profit after tax of Rs 4.93 crore for the second quarter of FY12, a fall of 58% as compared to Rs 11.8 crore in the previous quarter. 

Hardik Dhebar, group chief financial officer, Delta Corp joins CNBC-TV18 to speak beyond the numbers and highlight the way forward for the company.

Below is the edited transcript. Also watch the accompanying video 

Q: You have actually spoken about booking some more Kenya land revenues in the current quarter. Any reason why those were not booked?

A: It's just a question of a delay of 10-15 days. I can confirm that the final agreement has been signed and we made a disclosure to that effect to the stock exchange and the regulator in the later half of the quarter. So I guess we should be able to realize those revenues in this quarter or definitely in this financial year. So there is no ambiguity as far as the income in concerned. 

Q: So what was the potential size of sale and quantum of money raised through that sale then?

A: It's a USD 23 million deal, so at current levels, we should be able to realize in excess of Rs 120 crore. I guess that's the kind of revenue number that we can definitely look at from the sale that has got consummated.

In addition to that, since the numbers are small in terms of real estate addition where people have not been able to read is the fact that there have been some more similar income of 10% committed values being booked in Kenya again, which is nothing but a couple of more properties that were ready for sale have been actually contracted.

However, the final agreements and documentation is pending, we have not yet been able to recognize those incomes as well.

So on the whole on the real estate side also, we don't see as a company, too much to worry because every quarter it is difficult to have Rs 200 crore of sale coming in. But if you compare year-to-year, we will be more or less where we were last year.

Q: For the gaming business did you get revenues from all the three properties in the current quarter and should one expect that for the other two quarters as well?

A: Two properties have started operating now. We had Casino Royale which was operating in the last quarter and for the last full year. The Advani operations also have commenced from this quarter on a full fledged basis. The third property should come by sometime during the financial year in some form and fashion.

But you will appreciate to see that the gaming revenues have actually taken a leap from Rs 23 crore in the last year, they are at Rs 37 crore which is definitely a sizable jump. If you even look at quarter-on-quarter, from Rs 27 crore last quarter, we are at about Rs 37.5 crore this quarter.

So I think the focus area which we have always been saying that gaming and hospitality is the core and the focus area for Delta in the next 24-36 months - that's been outperforming and that's been growing pretty well. We are well on track for achieving our hopeful numbers that we have been setting targets for, for ourselves.

Q: What's the plan with the debt though for the second half?

A: The debt on the books is not very high. If you see on a consolidated basis also, the debt is not substantial. Bulk of the debt which is there on a consolidated basis comes out of the construction finance in Kenya which obviously, as on how the property keeps getting sold, debts get reduced. So the debt levels on a consolidated basis are going to come down drastically. On a standalone basis, obviously, Delta is a very un-levered company having a huge leveraging capability as we have always mentioned.