Delta Corp Conference Call Highlights of Q3-FY24

Earnings Snapshot

Questions & Answers

Question 1: Can you provide an example illustrating impact of new GST introduced in third quarter? Specifically, explain how charging process differed before & after October 1, considering hypothetical scenario of ₹ 1,000 or ₹ 5,000.

Answer: Certainly. Prior to October 1, we absorbed GST, paying 28% on our gross gaming revenue. This effectively cost us 21.875% of revenue. Post October 1, we shifted to paying 28% GST on sale of chips rather than on gross gaming revenue. For instance, if we sell ₹ 1 lakh worth of chips, we now pay ₹ 21,000 in GST. This change impacts cost structure, with GST payable on sale of chips, constituting approximately 30% of our gross gaming revenue.

Question 2: Regarding Y-o-Y revenue drop, was it solely due to impact of GST, or were there other contributing factors such as licensing changes or external events like World Cup Diwali?

Answer: Several factors influenced tanking of Q3 revenue. First of all introduction of GST in October November, which led to initial deductions, where we provided only 80% of chips, deducting 20% due to operational constraints. Additionally, external events like World Cup & Diwali season, which historically affects visitations, contributed to downturn. However, it's important to note that December showed positive recovery, returning to normal operational run rate observed in previous quarters.

Question 3: Considering impact of new regulatory norms, could you provide visitation numbers & absolute net realization per visitation for current quarter & same quarter last year?

Answer: In Q4, we had 124,000 paid customers, 4% lower than previous quarter & 6% lower than same quarter last year. December showed return to normal run rates. Net spend per head is similar, but due to lower visitations, there's 6% reduction, aligning with GST impact.

Question 4: With 6% lower visitation & 6% lower net revenue post-GST, resulting in 12% decline, is there any other explanation for lower numbers apart from intra-group transactions?

Answer: decline aligns with GST impact. We'll provide detailed breakdown. Intra-group transactions & legal costs related to GST cases contributed, offsetting lower variable costs due to decreased visitations. As for license fee renegotiation, ongoing conversations are in progress, considering government's review after 6 months. Fixed costs remain unchanged.

Question 5: Regarding new ship's CapEx, how much of total investment is pending, & when do you anticipate its completion?

Answer: Total CapEx for new ship is ₹ 280 crores to ₹ 290 crores. ₹ 175 crores have already been invested, & remaining amount will be deployed over coming months. project is on schedule, & we expect it to be online in third quarter of this year, with potential revenue in either third or fourth quarter.

Question 6: Concerning land purchased for integrated resort project & ₹ 130 crores invested, what are plans for land now, & is land-based casino still under consideration?

Answer: integrated resort project's land, involving ₹ 130 crores investment, is divided into three phases. Phase I focuses on theme park, & subsequent phases involve hotel, retail, & other amenities. land-based casino is not under consideration, as company has adapted strategies to retain customers post-GST changes. real growth is expected after new vessel comes into operation, doubling our capacity.