Unitech net dips 47% as sector in doldrums

Exit from ill-starred telecom JV expected to help core realty biz

The net profit of realty player Unitech dropped 46.7 per cent in the second quarter of 2012-13 to Rs 49.2 crore from Rs 92.5 crore in the same period last year, indicating recovery in the sector was to begin.

Managing Director Sanjay Chandra, till recently looking after the telecom business (in joint venture with Norway’s Telenor) of the group , said the exit from it would help management focus more on its core realty business. Unitech parted ways with Telenor recently, making an exit from telecom after being involved in an alleged 2G spectrum allocation scam.

“Agreement reached recently with Telenor to amicably settle all disputes with respect to Unitech Wireless has had a salubrious effect on the company”, he said. It not only freed valuable management time and other resources, but also brought a greater focus on the core business of real estate development, Chandra added.

Net sales were down 20.5 per cent to Rs 539 crore compared to Rs 679 crore last year.

It recorded sales bookings of 1.55 million sq ft of Rs 836 crore during Q2, slightly higher than Q1 sales booking of 1.51 million sq ft of Rs 701 crore.

The company launched 1.64 million sq ft in the second quarter, higher than the 1.27 million sq ft in the first.

“Capacity building for scaling construction activity remains a top priority and progress has been good in recent months”, Chandra said.

Consolidated net debt was Rs 5,566 crore, higher than the Rs 5,399 crore as of March.

Total expenses came down to Rs 467.7 crore, down 15 per cent from Rs 550 crore a year ago. Cost of materials consumed went up 1.5 times, indicating an increase in manufacturing activity. It went up from Rs 17 crore Q2 last year to Rs 43 crore.

The company delivered 1.42 million sq ft area during the first half of the fiscal year 2013. Of the projects launched before March 2009, 11.5 million sq ft is to be delivered of the total 24.7 million sq ft.

Of the projects launched after March 2009, 0.67 million sq ft has been delivered. Of the 32 projects, the company has 22 projects in the handing-over stage, the same as Q1, while 10 are to be handed over.

“Average price realisation increased 17 per cent to Rs 5,413 a sq ft compared to the previous quarter on a better product mix and overall uptick in prices,” said Chandra.

Though the result was declared over the weekend when markets were closed, on Friday, the stock closed at Rs 26.5 a share, 2.2 per cent down from the last day’s close.