New Delhi: India's largest realty firm DLF Friday reported a 49 percent drop in consolidated net profit to Rs 145.29 crore in the third quarter of this fiscal due to one-time provision of loss related to the settlement with DDA.
It had posted a net profit of Rs 284.8 crore in the year ago period.
DLF also announced appointment of three new directors on the board, including Rajeev Talwar who is currently group executive director.
Income from operations rose by 57 percent to Rs 2,058.42 crore during October-December period of this fiscal against Rs 1,310.04 crore in the corresponding quarter of previous year, DLF said in a filing to the BSE.
Total income rose by 13 percent to Rs 2,590.20 crore in the quarter ended December from Rs 2,291.25 crore in the year ago period.
Profits have dipped because of provision of losses of Rs 411 crore in the books of account related to its settlement with the Delhi Development Authority (DDA) following scrapping of a project at Dwarka in the national capital.
DLF recently announced a final settlement with DDA in the Dwarka Convention Centre project. It received a refund of Rs 675.81 crore from DDA as full and final settlement, after forfeiture of 25 percent of the earnest money.
"Though, the transaction was completed subsequent to the quarter end, a foreseeable loss of Rs 411.39 crore is recorded and disclosed as an exceptional item in these consolidated financial results," DLF said in the filing.
In July 2007, DLF had bagged a Rs 6,000 crore contract from DDA for constructing the convention and exhibition centre at Dwarka. However, the project got scrapped. DLF will now return 35 acres of land to DDA that it had got for Rs 900 crore.
Profits also fell due to increase in finance cost to Rs 633 crore during the third quarter of 2013-14 fiscal from Rs 581 crore in the corresponding quarter of previous year.
Meanwhile, DLF announced appointment of three directors on its board, which also approved re-appointment of Rajiv Singh as Vice-Chairman for a period of 5 years.
The board approved appointment of Ved Kumar Jain as additional director in capacity of non-executive independent director. He is the former President of the Institute of Chartered Accountants of India (ICAI).
DLF board approved appointment of Mohit Gujral and Rajeev Talwar as whole-time director for a period of 5 years. Gujral joined the company in 2010, while Talwar, an IAS Officer of 1978 batch, joined DLF in 2006.
"The appointments will allow DLF to further strengthen its management and leverage the vast experience of new directors in the current competitive business environment," DLF said in a statement.
DLF said its total sales booking stood at Rs 3,760 crore during April-December against Rs 2,575 crore in the corresponding period of previous year. Leasing volumes stood at 1.11 million sq ft of offices as compared to 0.98 million sq ft in the review period.
"The company has met the goals of non-core divestments with the successful consummation of divestiture transactions such as Aman Resorts, Pramerica Insurance JV and final settlement with DDA on the Dwarka land piece," DLF said.
With these divestment, the company is poised to meet its guidance of reducing net debt to Rs 17,500-18,000 crore by end of FY'14. "As on date, the net debt stands at Rs 17,400 crore approx".
"The company is comfortable with its current net debt levels and expects these to continue at similar levels till the economic cycle improves. However, the quality of debt shall continue to improve as annuity incomes continue to grow - currently almost 70 percent of the net debt is backed by annuity flows," DLF said.
During the past two quarters, the economic environment in the country has further worsened leading to slowdown in demand in all sectors including real estate. The company expects slow growth and high interest rate environment to continue at least for the next two quarters - till middle of FY'15.
"In spite of these economic conditions, the company shall continue to invest capex in creating high quality annuity yielding assets and invest in the upgradation of land through requisite approvals, consolidation and investment in infrastructure," DLF said.
The company has a total 'developable' potential at 312 million sq ft, of which 60 million sq ft is under construction at the end of the quarter.