DLF reports net loss of Rs 72 crore as Covid hits business

DLF said Covid-19 impacted operations for most part of the June quarter and was not comparable with the previous quarters.

Real estate developer DLF on Wednesday posted a consolidated net loss of Rs 72 crore for the June FY21 quarter as the nationwide lockdown due to Covid-19 disrupted construction schedules as well as adversely impacted mall operations.

The developer had reported a net loss of Rs 1,867 crore in Q4FY20 due to a one-time exceptional provision and a one-time DTA reversal on adoption of a lower-tax rate.

DLF said Covid-19 impacted operations for most part of the June quarter and was not comparable with the previous quarters.

The company’s total income fell 65% sequentially to Rs 646 crore in April-June. On an annual basis, it declined 58% from Rs 1,541 crore in Q1 FY20. It reported an Ebitda of Rs 99 crore in Q1 FY21.

On revenue impact, DLF said, “As per the accounting standards and our revenue recognition policy, revenue is recognised at the time of handing over possession to customers. Issuance of possession letters got adversely affected during lockdown. Consequently, financial results were impacted during the quarter Q1 FY21”.

Its rental business, DLF Cyber City Developers (DCCDL) reported a consolidated revenue of Rs 929 crore and a net profit of Rs 160 crore during the April-June quarter.

“The performance in rental business was impacted owing to the retail malls remaining shut during the lockdown period and consequent rental waivers,” DLF said.

Going ahead, the company said, “We have made significant progress in cost optimization, which has consequently resulted in significant reduction of overheads, enabling improvement of margins in times ahead. Tight cash management led to reduction in net debt by Rs 42 crore, despite such challenging times”.

On the office rentals business, DLF said it ensured continuity for office tenants and the business continues to hold on with robust collections of more than 95% for the quarter. “We continue to be optimistic about our office business. However, retail business was impacted owing to retail malls remaining shut during the lockdown period. The retail malls have begun opening up but with restrictions for multiplexes, limited operational timings and social distancing measures. We are witnessing continued but gradual recovery in the retail business,” it said.

Due to the lockdown, the residential segment was muted, and accordingly, witnessed new sales booking of only `165 crore. After the unlocking, the company is witnessing a pick-up in enquiries and some early green shoots of demand. “We expect the demand to improve gradually and believe that its strong brand image, healthy balance sheet and commitment to quality will act as a catalyst for future growth,” it said.

New products under planning and execution currently stand at around 21 million sq ft (msf). “Construction has recommenced at all our sites and we are operating at around 65% of pre-Covid levels presently. Execution of new products across both development and rental business remains on track. Projects under development in DCCDL portfolio stand at 4 msf,” it added.

DLF did not avail any moratorium on its debt facilities. It expects that as REITs grow in number and scale, the rental business will have higher access to liquidity and more transparent valuation benchmarks.