DLF Q2 consolidated net slips 5% to Rs 418 cr

Country's largest realty firm DLF today reported 5 per cent decline in its consolidated net profit to Rs 418.38 crore for the quarter ended September 30, 2010, mainly due to higher interest cost.

The company had posted Rs 439.74 crore profit in the year-ago period.

The consolidated revenue, however, rose by 39 per cent to Rs 2,520 crore during the second quarter of this fiscal as compared with Rs 1,810 crore in the corresponding period of previous fiscal, DLF said in a statement.

The finance charges during the quarter stood at Rs 433.76 crore as against Rs 248.61 crore in the year-ago period.

The company official attributed the decline in net profit to higher interest cost and increased focus towards mid-income housing where margins are lower.

DLF had a net debt of over Rs 18,000 crore at the end of the first quarter. The statement did not mention the net debt as on September 30, 2010.

The company also announced that it has raised Rs 413 crore in the second quarter from divestment of non-core assets, which includes hotel plots. In the first quarter, it had generated Rs 294 crore by selling non-core assets.

DLF had targeted to raise Rs 5,500 crore through sale of non core assets. In last fiscal, it raised Rs 1,800 crore and decided to retain wind power business worth Rs 1,000 crore.

During July-September this fiscal, the company leased 1.56 million sq ft and booked 2.08 million sq ft of area.

"The above results reflect stable macroeconomic environment and growing real estate sector. The company expects that its strategy of pan-India offerings of residential products shall yield good returns in the future," DLF said.

The company noted that the commercial office and retail segment continues to show improvement and the demand in this segment is encouraging given the growing levels of income of both the corporate and individuals.

DLF, however, expressed concern over the recent sharp increases in the commodity prices which could have an adverse impact on the construction costs.

"Whilst in the near term, the company expects the current pricing trends to help sustain the margins, but it is keeping a watchful eye on the future trends and its impact," it said.

DLF has 406 million sq ft of developable area, out of which 57 million sq ft area is under construction at the end of second quarter.