DLF Ltd has posted 11 per cent fall in its consolidated net profit for three months ended September 2011, hurt by higher finance charges and tax expenses. The consolidated revenue was up just two per cent over the year-ago period.
The company said the industry continues to see a “challenging economic environment” with customers deferring buying decisions due to higher interest rates. This, along with decline in new launches, had lead to lower sales volumes during the quarter, it said.
Sales muted
“The company too witnessed muted sale volumes as its previous product offerings received a strong customer response and it did not have much unsold inventory. Sales volumes were further impacted by the delay in the approvals of new launches,” a DLF statement said.
But it expects a stronger performance in the next six months due to more launches (in plots and group housing segment) and delivery of projects in Gurgaon, Chennai and Kochi among other cities.
Non-core activity
DLF hopes to speed up the non-core divestment plan including the hospitality assets “which will further help in moderation of debt levels.” The debt level – a key monitorable for investors – has increased in September quarter. However, the company did not give any details. The net debt was Rs 21,524 crore on June 2011.
The finance charges rose 21 per cent at about Rs 526 crore, while tax expenses doubled to Rs 147.5 crore. ‘Other income' dropped sharply to about Rs 45 crore. About 1.28 million square feet of sales were booked in the quarter. DLF garnered Rs 245 crore from sale of ‘non-core' assets.
DLF said that definitive agreements have been signed for the sale of Noida IT Park while the process for sale of Pune IT SEZ was at advanced stage. The deals will be completed in the current quarter, it said.