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ICICI Direct Report
Phoenix Mills Ltd. reported a washout quarter as expected, owing to the impact of Covid-19, which led to a decline in its retail and hospitality assets revenues and profitability coupled with zero revenues in the residential segment.
Reported revenues de-grew approximately 78% YoY to Rs 134.7 crore, with core portfolio (commercial + retail + hospitality) revenues down 67% YoY.
Reported Ebitda margin was up 460 basis points YoY to 52.2%, given cost rationalisation. The company reported a loss of Rs 42.2 crore.
During the quarter, the company had a cash burn of Rs 65 crore, also aided by IT refund of Rs 40 crore. The company, however, indicated that the cash burn rate has peaked and is likely to reduce as malls recommencement and rental begin to kick in.
We note that Phoenix Mills has agreed to 50% rental waiver in the lockdown period for 75-80% retailers. For a further period of up to six months in FY21, rentals are expected to be restructured with reduction in minimum guarantee by approximately 25-30% but with higher revenue share. Near term pain is imminent.
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