Building and managing airports will become the core business of GMR Infrastructure Ltd with airport business to contribute 52% of its topline by 2010-11.
Sees the segment contributing over half of its revenues by 2010-11
Building and managing airports will become the core business of GMR Infrastructure Ltd in the coming years. The company, which announced a 1:5 stock split on Sunday, said airport business would contribute 52% of its topline by 2010-11.
Currently, airport business contributes 29.87% to its revenues, while power and road bring in 62% and 7.27%, respectively.
Madhu Terdal CFO, GMR Infrastructure said, “We are in the process of strategically shifting our focus, wherein airport building and management will be our foremost business.”
The company hopes to get the Hyderabad airport functional in the next two years. It sees the airport accounting for 30% of the airport traffic in the country. With this, the contribution from power and road segments will change to about 36% and 14%, respectively.
For the year ended March 31, 2007, the company announced an 85% growth in gross revenue from operations to Rs 1,969 crore from Rs 1,062 crore. Earnings before interest, depreciation, taxes and amortisation saw a growth of 23% from Rs 456 crore to Rs 562 crore. Profit after tax went up 16% to Rs 242 crore (Rs 208 crore).
For the record, Delhi International Airport Ltd contributed Rs 588 crore to the topline and Rs 37 crore as profits in a short span of ten months. The profits accrued after sharing 46% with the government, Terdal pointed out.
Passenger traffic at Mumbai, Delhi and Hyderabad airports has been growing at 21%, 26% and 44%, respectively.
GMR’s quest to grow in the segment will continue. “We are going to bid for the greenfield airport project of Chennai and the Navi Mumbai airport project, whenever the bidding process starts,” Terdal revealed. “We will also bid for the non-metro modernisation projects of 35 airports. Another area of focus is on building merchant airports, for which a separate team is set up to do research work on land suited for acquisition,” he added.
A merchant airport project is treated like a total greenfield project where the government’s role is restricted to air traffic control operations and security.
GMR’s early success with the Delhi airport has given the Hyderabad-based company enough confidence to scout for global opportunities.
The share of aero revenue to the overall revenue is 45.65%. Of the 55% or so coming from non-aero sources, 28% is pure non-aero, while 26% is cargo.
In the first phase of Delhi airport, 45 acres out of the total of 250 acres has been carved out and given to Delhi Aertropolics Ltd to build a hospitality district.
The aim of the hospitality district is to create mini cities with luxury hotel, 4 star hotel, 3 star hotel, premium hotel apartment and resorts with spas.
As per a government study, Delhi will need 20,000 hotel rooms before 2010. According to a study by Jones Lang Lasalle and Lehman Brothers, 8,000 hotel rooms will be needed around the airport area by the same time. Hospitality district aims to meet a percentage of this need, GMR said.
In Hyderabad, GMR has received approval from the Centre for setting up two SEZS and an airport.
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