DLF, the country’s largest property developer, reported a 28 per cent fall in its consolidated net profit at Rs 100.05 crore for the second quarter due to lower sales and higher interest and tax outgo. The company had posted a net profit of Rs 138.5 crore in the year-ago period.
Income from operations declined 4 percent to Rs 1,956.1 crore during the July-September period, compared with Rs 2,039.5 crore a year ago.
DLF, which has been selling non-core assets to pare debt and focus on the real estate business, expects to trim net debt to Rs 17,500 crore by the fiscal-end from Rs 19,508 crore as of September 30. This is despite a squeeze in margins because of sluggish sales.
“Sequentially, net debt has declined by Rs 861 crore from Rs 20,369 crore (as of June 30) to Rs 19,508 crore (as of September 30). Given the pipeline of divestitures already executed but not yet closed, we maintain the fiscal 2014 guidance of net debt of Rs 17,500 crore,” said Saurabh Chawla, Executive Director, during an investor presentation.
The company has already exited the windmills and insurance businesses and sold large land tracts as part of a strategy to unload non-core assets and lower its debt burden.
DLF said it has closed a deal to sell its stake in curtain walls company Star AluBuild Pvt Ltd to Japan’s Lixil Corp. It has also reached an agreement with Violet Green Power to sell a 33-MW capacity wind turbine business in Rajasthan for Rs 67.44 crore.
In addition, the developer has signed a share purchase agreement with Dewan Housing Finance Ltd for sale of shareholding in DLF Pramerica Life Insurance Co Ltd, which is currently awaiting regulatory approvals.
The company further expressed confidence to close a deal to sell Amanresorts, a luxury hospitality chain with properties across the world, back to its founder, Indonesia-based hotelier Adrian Zecha.
“If the Aman deal doesn’t go through by the fourth quarter, we are looking at two other big deals. We hope to raise Rs 3,500 crore through the deals,” said Chawla.