DLF Ltd, the country's biggest real estate developer, said its fourth-quarter consolidated profit plunged 93 per cent as buyers deferred purchases and the company was forced to offer discounts to customers at its residential projects.
Profit dropped to Rs 159 crore(1.5 billion) in the three months ended March 31, 2009, from Rs 2,177 crore ( 21.7 billion) in the same quarter a year earlier, the New Delhi-based developer said in a statement. This follows a 69 per cent drop in the third-quarter profit.
Earlier in the day, another real estate company --Puravankara Projects--reported an 80 per cent fall in its fourth-quarter profit, underlining the real estate sector's gloomy scenario.
DLF's revenues slumped 69 per cent to Rs 1,351 crore(13.5 billion) from Rs 4,372 crore (43.7 billion) in the corresponding period of the previous year. Earnings before interest, depreciation, tax and amortisation also plunged 87 per cent, to Rs 384 crore(3.8 billion) from Rs 2,849 crore,(28.4 billion) the company said.
During the quarter, revenue from DLF Assets Ltd was Rs 322 crore, against Rs 1,845 crore (18.4 billion) in the quarter ended March 31, 2008. DLF received over Rs 800 crore(8 billion)as advance from DAL during the quarter. The company had suspended further sales to DAL and by the end of the fiscal has not fully completed the originally proposed volume of delivery.
DLF has estimated that its full-year revenue will see an impact of Rs 688 crore (6.88 billion) because of the discounts it offered to customers of its residential projects in Chennai, Bangalore and Gurgaon. While some of the hit has been recognised in the full year's operating profit statement, a part of it will be recognised in the next quarter, too, a company official said, without giving details.
The company estimates that it will have to take a hit of Rs 302 crore (3 billion) on its profit before tax because of the stepped-up discounts.
The company's full-year profit fell 41 per cent to Rs 4,629 crore (46.29 billion) from Rs 7,812 crore (78.12 billion) a year earlier, while revenue slid 28 per cent to Rs 10,541 crore (105.41 billion) from Rs 14,684 crore( 146.84 billion) in the period.
While the company expects the demand scenario in the residential space to improve progressively, the outlook for the commercial business continues to remain weak, given the global cues. DLF also witnessed marginal cancellations in some of its existing pre-leased space across the country.
The company has also decided to exit its large township projects in Bidadi and Dankuni. Similar actions are being contemplated for other long-gestation projects/assets, including hotels, DLF said in the statement.
As a result of this, the total developable area has dropped to 425 million sq ft (MSF) from 751 MSF a year earlier. A total of 36 MSF of projects' area is under construction at the end of the fourth quarter.
