New Delhi: Real estate firm DLF Ltd’s net profit more than doubled in the June quarter, compared with the corresponding period a year ago, owing to a one-time extraordinary gain from the sale of DT Cinemas.
India’s largest developer’s net profit rose 107.6%, while revenue dropped 21.82% to Rs.1,867.46 crore in the same period.
During the June quarter, DLF concluded the DT Cinemas sale transaction to multiplex owner PVR Ltd, resulting in a one-time extraordinary gain of Rs.372 crore.
PVR revised the terms of its deal with a unit of DLF to buy the DT Cinemas chain after India’s competition watchdog raised objections. The value of the deal with DLF Utilities Ltd was lowered to Rs.433 crore from the original Rs.500 crore.
“The residential sector remains muted across all micro markets. The company continues to implement its strategy of completing legacy projects and creating finished inventory and, hence, is well positioned to profit when there is an uptick in market dynamics,” DLF said in its earnings statement.
“The company expects increased momentum in the commercial space. As it 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 at full pace and finishing of luxury retail mall at Chanakyapuri is underway. The company is focused on aggregating leases which are expiring to enable it to contract it to ‘high value’ high creditworthy tenants,” it added.
The developer said it has achieved gross residential sales of Rs.470 crore during the quarter, gross leasing of 0.86 million sq. ft, completed projects of around 3.63 million sq. ft and is in the process of handing these over. It has a total of 27.7 million sq. ft of projects under construction as of the June quarter.
Residential sales have been a concern for DLF for the past two years, with the National Capital Region (NCR) being the worst affected by the real estate slowdown. On the residential development front, DLF saw net sales bookings of 1.14 million sq. ft, worth Rs.3,150 crore in 2015-16 as against 1.46 million sq. ft of net sales bookings worth Rs.2,955 crore the previous year.
The firm is currently in the middle of a stake sale to raise about Rs.12,000 crore, with the promoters selling 40% in its commercial property arm, DLF CyberCity Developers Ltd, to institutional investors.
DLF’s results were announced after market hours. On Monday, shares of DLF closed at Rs.158.30 apiece on BSE, down 1% from their previous close, while the benchmark Sensex index rose 0.43% to 27,902.66 points.