DLF Ltd, the largest realtor in the country by market capitalisation, has reported a net loss for the three months ended March 31, 2013; this is its first quarterly loss. The firm posted a net loss of Rs 4.19 crore in the quarter compared with a net profit of Rs 211.7 crore in Q4 FY12. Total income decreased from Rs 2,747.45 crore to Rs 2,318.79 crore.
The firm attributed this to changes in its accounting policies. The developer, which follows a project-based accounting policy, has started recognising revenue only when construction cost incurred by it exceeds 25 per cent of the budgeted cost of the project (inclusive of the land and construction cost).
The new accounting policy will result in lag of recognition of revenue and profits by 12-18 months.
However, what came as a bigger disappointment was the fact that the firm missed its debt reduction targets by a wide margin. It ended FY13 with net debt of Rs 21,371 crore against its previous forecast of Rs 18,500 crore by March 31, 2013. On Friday the company said it now aims to cut this to Rs 17,121 crore by March next year.
The firm had sold a large land parcel in Mumbai last year to Lodha Developers besides selling almost all of its wind power assets and striking a deal to exit the hotel business as a part of its debt reduction move.
The management buyout of Aman Resorts by Adrian Zecha is yet to be completed. Analysts present in an investor call said that Zecha has tied up the equity component but he is yet to find a partner for the debt component. DLF said the deal is expected to close by June 30, 2013. The firm has also not received the full amount from its wind energy asset sale.
DLF booked gross sales of 2 million sft in Q4 FY13 compared with 6.76 million sft in Q4 FY12.
DLF’s overall performance also lagged during the year as it sold 7.23 million sft for FY13 in its development unit which consists of its residential project launches compared with 13.55 million sft in FY12. In the commercial office space segment, it managed to lease 1.14 million sft for FY13 compared with 1.41 million sft in FY12.
It completed projects of 12.4 million sft during FY13 against 13 million sft in FY12. Its EBITDA margin for the year was at 43 per cent compared with 44 per cent in FY12.
It has indicated that in next three years, it would like to reach a steady state EBITDA of Rs 8,200 crore, though analysts are sceptical of the forecast. It also plans to reduce its net debt to less than Rs 10,000 crore and be cash free positive by FY15.