DLF Posts 22 Per Cent Slide In Quarterly Profit
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DLF Ltd, India's biggest listed property developer, posted a 22 per cent slide in quarterly net profit amid a market slump due to high interest rates and weaker economic growth, and said it may take at least 12 months for sales momentum to improve.
DLF is also in talks with private equity firms about selling stakes in some projects, according to a presentation on its website.
It is on target to achieve an annuity income of 24 billion rupees ($375 million) by the end of the fiscal year to March 2016.
The company reported a consolidated net profit at Rs 171.62 crore for the quarter ended March 2015 mainly due to higher tax expenses and fall in other income.
Its net profit stood at Rs 219.68 crore in the year-ago period, DLF said in a statement.
Income from operations fell marginally to Rs 1,953.69 crore in the fourth quarter of last fiscal from Rs 1,969.45 crore in the corresponding period of the previous year.
Net profit dipped during the fourth quarter of 2014-15 on account of fall in other income to Rs 147.47 crore from Rs 552.15 crore in the year-ago period. Moreover, tax expenses were at Rs 76.73 crore during January-March quarter against gains of Rs 67.84 crore in the year-ago period.
In the full 2014-15 fiscal, DLF's net profit declined by 16 per cent to Rs 540.24 crore from Rs 646.21 crore in the previous year.
Income from operations dipped by 8 per cent to Rs 7,648.73 crore in last fiscal from Rs 8,298.04 crore in the 2013-14 financial year.
Total revenue stood at Rs 8,168 crore in 2014-15 fiscal, down by 17 per cent from Rs 9,790 crore in the previous year.
"In the year gone by, the ensuing high interest rates and consequent low consumer demand have adversely impacted the real estate sector in the country," DLF said.
Despite the continued headwinds, the company said it has witnessed good response for its luxury housing projects in Gurgaon.
"Compared to the residential business, the business of leasing offices and retail malls showed much better traction and decent growth of 1.5 million sq ft," DLF said.
On operational front, DLF said that it achieved a gross sales of 2.25 million sq ft of Rs 3,850 crore during the last fiscal, while completed projects of 13.46 million sq ft of residential and commercial office space.
DLF has previously said it has hired investment banks JPMorgan and Morgan Stanley to advise it on planned listings of real estate investment trusts and other efforts to raise cash. The company plans to list two REITs.
DLF has a land bank of about 300 million sq ft, of which 46 million sq ft is under construction. It had a net debt of Rs 20,336 crore at the end of December last year.
"Subject to requisite approvals, the company is gearing itself to set up at least one REIT (Real Estate Investment Trust) platform within this fiscal year," DLF said.
In an order against DLF last week, the Competition Commission of India (CCI) ruled that the realty giant was guilty of indulging in "unfair and abusive" business practices in sale of apartments in a Gurgaon housing project.
Reacting to the "cease and desist" order, DLF had said that it was "very surprising" that no penalty had been imposed on various other realtors operating in the same market with the same product line.
CCI asked DLF Gurgaon Home Developers Private Limited and its group companies to "cease and desist" from such unfair trade practices, but did not impose any fresh monetary penalty as Rs 630 crore fine has already been slapped on DLF for similar violation during the same period in a separate case.
Countering DLF's claim that it was being singled out by the CCI, a top official of the fair trade regulator said on Wednesday the realty giant was the only major player in Gurgaon and only a dominant player can abuse the market.
"DLF is the only dominant player in the Gurgaon market. CCI has a mandate to look into abuse of dominance and there is no other company enjoying such a dominance," the CCI official said.