DLF's net debt slightly up at Rs 21,500 cr

The country's largest realty firm DLF today said its net debt had increased by Rs 100 crore during the April-June quarter this fiscal to Rs 21,524 crore, but expects that borrowing would start moderating from this quarter onward.

The company, which yesterday reported a 13% fall in net profit to Rs 358.36 crore for the quarter ended June, said the company would utilise the proceeds from the sale of non-core assets (like hotel plots) to cut debt.

According to an analyst presentation, the company's net debt stood at Rs 21,524 crore as of June 30, 2011, compared to Rs 21,424 crore at the end of last fiscal.

"While debt levels have remained similar to the previous quarter, our momentum on the non-core asset divestments has gathered pace and these coupled with operational cash flows will help us in moderating our current debt levels," DLF Group Chief Financial Officer Ashok Tyagi said.

DLF raised Rs 165 crore from sale of non-core assets in the first quarter of this fiscal. The company aims to raise Rs 10,000 crore from this process and so far, it has realised Rs 3,235 crore from divestment.

"Stable debt levels in the quarter, visibility with respect to non-core divestments to be seen by end of Q2. Consequently, the proceeds from these to be applied for debt reduction," the presentation said.

DLF said that some deals for the sale of such assets were in advanced stages and expressed confidence that it would meet the target to raise the remaining Rs 7,000 crore in 2-3 years.

"Non-core asset monetisation gaining momentum, some deals at an advanced stage, while others are seeing encouraging responses at desired price points. On track to meet the divestment target of Rs 6,000-7,000 crore over the next 2-3 years," the presentation said.

Meanwhile, DLF's consolidated net profit fell during the June quarter to Rs 358.36 crore from Rs 411.03 crore in the year-ago period on higher expenditure and finance charges.

However, its consolidated sales rose by 20.57% to Rs 2,445.82 crore in the review period from Rs 2,028.53 crore a year ago.

The company's expenditure increased by about Rs 300 crore to Rs 1,505 crore during the June quarter primarily on land, development rights and constructed properties. Finance charges rose to Rs 496.41 crore from Rs 388.44 crore.

During the first quarter, DLF achieved sales booking of 2.2 million square feet, as against 1.9 million square feet in the same quarter last year. It leased 0.73 million square feet of area in the review period, as against 0.98 million square feet in April-June, 2010.

The company said it would continue to focus on launching plots, which enables it to mitigate the current inflationary environment and accelerate cash flows.