BackDLF, Godrej Properties post losses in Q1 due to covid-led business disruption
DLF, India’s largest real estate developer, posted a net loss of ₹71.52 crore in the June quarter. It had posted a net profit of ₹413.94 crore in the corresponding year-ago quarter
PremiumReal estate firms DLF Ltd and Godrej Properties Ltd (GPL) have reported losses in the June quarter, when due to the lockdown, construction activities were limited leading to almost no revenue recognition and poor operating cash flows.
DLF, India’s largest real estate developer, posted a net loss of ₹71.52 crore in the June quarter. It had posted a net profit of ₹413.94 crore in the corresponding year-ago quarter.
Total income dropped by 58.01% to 646.98 crore during the period.
“…The company has attempted to leverage this crisis into an opportunity to transform itself into an agile, leaner and far more efficient organization. We have made significant progress in cost optimization, which has consequently resulted in reduction of overheads, enabling improvement of margins in times ahead. Tight cash management led to reduction in net debt by ₹42 crore," DLF said on Wednesday.
DLF’s rental business that operates under DLF Cyber City Developers Ltd performed relative better, largely led by its office business as shopping malls remained closed.
Mumbai-based GPL posted a net loss of ₹20.23 crore in the first quarter against a profit of ₹89.87 crore in the corresponding quarter last year. Its total income for the June quarter declined 72.59% to ₹195.66 crore from the year ago period.
GPL also raised ₹1,000 crore in July through the allotment of unsecured, redeemable, non-convertible debentures on a private placement basis for a term of three years at 7.5%.
“…While we expect poor reported earnings and cash flows this financial year due to the lockdown and the major impact this has had on our annual construction plan, we expect strong momentum in both portfolio project additions and new project launches during the consolidation that is underway in the sector and we will continue to focus on rapidly growing our market share," said Pirojsha Godrej, executive chairman, GPL.
On operational front, Godrej Prooerties said its sales bookings increased to 2.51 million sq ft worth ₹1,531 crore in the April-June quarter, as against 1.35 million sq ft worth ₹897 crore in the year-ago period.
It also leased around 2 lakh sq ft office space to A.P. Moller, Maersk’s business units at its project Godrej Two in Mumbai.
On its rental business, DLF said it is optimistic about the office business but its retail business was impacted during the lockdown period.
“…We are witnessing continued but gradual recovery in the retail business," it said.
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