Unitech in red in Q4 on telecom biz writedown

Net sales up 22%; profit dips to Rs 70 cr in 2013-14 from Rs 201 cr in 2012-13

Real estate player Unitech on Wednesday reported a net loss of Rs 51.5 crore for the fourth quarter ended March, owing to a writedown of a little over Rs 100 crore investment in the telecom business. The company had a net profit of Rs 30 crore during the corresponding quarter last year.

“During the quarter, the company made a provision of Rs 103.02 crore towards diminution in value of its investment in wireless business,” Unitech said. In October 2012, Unitech exited from a telecom joint venture with Norway’s Telenor by selling its 32.75 per cent stake to the latter. The company had written off a similar amount during the 2012-13 as well. The total investment of Unitech in the telecom business was Rs 900 crore.

For 2013-14, Unitech’s net profit declined to Rs 70 crore from Rs 201 crore in 2012-13. Total income from operations rose to Rs 2,933 crore during 2013-14 from Rs 2,440 crore in 2012-13.

Unitech’s consolidated net debt as on March 31 was Rs 6,316 crore. The net debt to equity ratio stood at 0.55. The company achieved sales booking of 2.33 million sq ft and the total value of bookings stood at Rs 1,502 crore in 2013-14.

In the fourth quarter, the company’s net sales were up 22 per cent to Rs 1,033 crore from Rs 848 crore in the corresponding period of the previous year. Profit after tax from ordinary activities stood at Rs 43 crore.

Managing Director Sanjay Chandra said, “The year gone by has been very challenging for the real estate sector. While, on the one hand, demand for housing was sluggish for most part of the year, on the other, construction and financing costs continued to rise.” In this environment, the company’s focus was primarily on ensuring that construction activity in its ongoing projects didn’t suffer while managing a tight cash flow situation.”

Chandra expects the new Bharatiya Janata Party-led government under Narendra Modi to give a major thrust to development of housing and urban infrastructure, creating new opportunities for real estate companies.

“The company is gearing itself to benefit from the widely expected improvement in the economic environment by undertaking various initiatives aimed at balance sheet strengthening, enhancing project execution capacity and boosting sales capabilities. Speeding up delivery of finished products is our key priority for the coming year,” he added.  

The company’s shares closed up six per cent on Wednesday at Rs 27.95 apiece on the BSE.