Real estate developer Unitech Ltd reported a 47 per cent fall in its net profit for the second quarter ended September 30 on the back of rising input cost and interest rate hike, among other factors. Its net profit stood at Rs 92.46 crore at the end of second quarter of 2011-12, against Rs 173.76 crore in the corresponding period last year. Net sales for the quarter was Rs 626.06 crore, down Rs 18.45 crore from the income same period in the previous year.
Unitech achieved sales bookings of 1.8 million sq ft worth over Rs 1,068 crore this quarter, against 1.9 million sq ft worth Rs 1020 crore in the first quarter of 2011-12. In April-September, the real estate player, did sales bookings of 3.71 million sq ft valued at Rs 2088 crore. Of this, 0.48 million sq ft was in the non-residential segment, and 3.22 million sq ft in the residential segment.
The expenditure was up 23.92 per cent to touch Rs 496.4 crore in the second quarter, compared to Rs 400.57 crore in the same period last year.
However, it reduced its debt by Rs 191.02 crore during the July to September quarter, bringing the net debt level down to Rs 5144.04 crore. The company is looking to reduce its debt, by Rs 500 crore by the end of this financial year from the sale of non-residential projects, which is often referred to as non-core assets. In the first half, it has cut debt by Rs 394.69 crore. The net debt to equity ratio for the first half stood at 0.43.
Unitech managing director Ajay Chandra, while calling the real estate environment “challenging”, said, apart from continuing with its strategy of offering products targeted at affordable/mid housing segments, the company has been taking various measures to not only deal with the current situation but also position itself to benefit once the business environment starts improving.
Unitech delivered 0.5 million square ft of completed area this quarter and 2.1 million square ft in the first half April-September.
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It finished and delivered just 2 per cent of the total projects launched since March 2009, that is just 0.5 million square ft out of the total deliverable area of 20.4 million sq ft. But, for the projects launched before 2009, the developer was able to finish or hand-over 76 per cent of the projects, accounting for 18.5 million sq ft area out of the total deliverable area of 24.1 million sq ft. The company has categorised its residential projects as pre- and post-2009, mainly as an indicator of before and after the economic downturn in India.
Unitech, plans to develop about 2 million sq ft of shopping malls across the country in the next three years. According to a company executive, the realtor is focusing on developing retail outlets across Noida, Mohali, Kolkata, Kochi, Bangalore, Lucknow and Dehradun, among others.
In September in its annual general meeting, Unitech’s shareholders rejected the Rs 30 crore dividend proposed by the board. The company had told Business Standard that shareholders wanted Unitech to utilise the funds for business purposes, given the prevailing high interest-rate environment.