India's largest realty firm DLF today reported a 46 per cent decline in its consolidated net profit at Rs 98.14 crore for the quarter ended December on lower sales and higher finance cost.
Its net profit stood at Rs 182.11 crore in the year-ago period, the company said in a regulatory filing.
Income from operations, or net sales, fell by 30 per cent to Rs 2,057.92 crore in the third quarter, from Rs 2,949.54 crore in the corresponding period of the previous year.
The company's finance cost rose to Rs 758.64 crore, from Rs 670.6 crore during the period under review, although tax expenses fell sharply to Rs 51.58 crore from Rs 238.88 crore.
During April-December, the company's net profit rose to Rs 565.65 crore, from Rs 514.16 crore in the same period of the previous year.
Income from operations, however, fell to Rs 5,996 crore during April-December of this fiscal, from Rs 7,379 crore a year earlier.
DLF has a net debt of over Rs 20,000 crore and the company's promoters are planning to reduce the borrowing by selling their 40 per cent stake in the DLF's rental arm DLF Cyber City Developers Ltd (DCCDL) for an estimated Rs 12,000- 14,000 crore.
GIC and Blackstone are in the race to acquire the stake. DLF owns the remaining 60 per cent in the DCCDL.
(REOPENS DCM 114)
On the proposed stake sale in DCCDL, DLF said: "The
discussion with short-listed investors is at an advanced stage and shall be presented to the committee of independent directors for their evaluation and final decision."
In lieu of this, conversion period for compulsorily convertible preference shares (CCPS) issued to the promoters in DCCDL has been extended by one year at their request to facilitate its sale, the company added.
In late 2009, DLF had announced merger of its subsidiary DCCDL with promoter firm Caraf Builders & Constructions. DCCDL had then issued CCPS worth Rs 1,597 crore to promoters.
Post-conversion of CCPS into ordinary shares, promoters will have a 40 per cent stake in DCCDL, which holds bulk of the DLF's commercial assets. DLF has about 30 million sq ft of commercial area with an annual rent of about Rs 2,500 crore.
On the operational front, DLF said: "The performance in the last quarter was subdued as markets adjusted itself to a new paradigm initiated by the demonetisation move."
"While demonetisation is extremely positive for the company and the industry, it has had short-term negative impact on secondary sales, which in turn has impacted primary off-take," DLF said in a statement.
The company expects that this period of adjustment may continue for the next few quarters till the time secondary market stabilises and customers start to purchase new products.
DLF said it continues to remain focused on execution and creation of finished inventory. With record deliveries of 11 million sq ft of area in the first nine months of the fiscal, the residential projects under construction have come down to 19 million sq ft.
Office leasing business continues to witness healthy traction, backed by expansion in the services sector. The leasing rates exhibited growth in line with the company's projections.
Retail sales at the malls, where the company enjoys revenue share, did witness some temporary fallback. Almost all of the retailers, with the exception of few, are now experiencing normal sales momentum.
