India’s largest realty firm DLF today reported more than two-fold jump in consolidated net profit to Rs 261.42 crore for the quarter ended June 30, helped by sale of its cinema business to PVR.
Its net profit had stood at Rs 125.87 crore in the April- June quarter of last financial year.
Income from operations fell by 22 per cent to Rs 1,867.46 crore during the first quarter of the current fiscal, from Rs 2,388.72 crore in the year-ago period.
DLF’s total income declined however to Rs 2,025.58 crore for the quarter ended June, 2016-17, from Rs 2,520.02 crore in the year-ago period.
The company’s finance cost increased to Rs 747.84 crore from Rs 621.82 crore during the period under review.
DLF has booked a profit before tax of Rs 372 crore under exceptional item from sale of its cinema business. In May, it had entered into an amended agreement to sell its 32 screens of DT cinemas to multiplex operator PVR at a revised consideration of Rs 433 crore.
The company has a land bank of 281 million sq ft, of which 37 million sq ft is under construction.
DLF promoters are likely to sell 40 per cent stake in a rental arm DLF Cyber City Developers Ltd (DCCDL) by September, a deal estimated to fetch around Rs 12,000 crore. It would continue to own 60 per cent stake in the DCCDL.
The promoters – billionaire K P Singh and family – would reinvest a significant part of the amount realised from this sale into DLF Ltd, helping the realty giant to reduce its debt substantially.
Three global institutional investors — Blackstone, GIC and Abu Dhabi Investment Authority — have been shortlisted as potential buyers. Due diligence process is on and agreement is likely to be signed by September.
DCCDL has about 25-26 million sq ft of leased commercial space with an annual rental income of about Rs 2,250 crore. The subsidiary also has 20 million sq ft of future development potential. Later in a statement, DLF said: “The company successfully consummated the DT cinemas sale to PVR resulting in a one-time extraordinary gain of Rs 372 crore.”
During the first quarter, the company achieved gross sales of Rs 470 crore, while gross leasing stood at 0.86 million sq ft. It completed projects of 3.63 million sq ft and delivery is underway.
On the market, the company said that the housing sector remained muted across all micro-markets.
“The company continues to implement its strategy of completing legacy projects and creating finished inventory and hence well positioned to profit when there is an uptick in the market dynamics,” it added.
DLF said that it expects increased momentum in the commercial space.
“As the company has exhausted most of its available commercial stock, it has commenced construction of office space in Chennai IT SEZ in the second quarter. Construction of Cyber Park (Gurgaon) at full pace and finishing of luxury retail mall at Chanakyapuri is underway,” the statement said.
DLF is focused on aggregating leases which are expiring to enable it to contract it to ‘high value’ high credit worthy tenants.