DLF and UNITECH’s Profit Witness Record Low

February 1, 2009	(Be the first to rate this story!)  Loading ...
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DLF Ltd. and Unitech Ltd., India’s biggest property developers, said quarterly profits plunged to record lows as the deepest economic slump in six years damped demand for homes, offices and malls. Net income fell 69 percent to 6.71 billion rupees ($137 million) in the three months ended Dec. 31, DLF reported, missing the 15.9 billion rupee median estimate of analysts in a Bloomberg News survey. Unitech profit slid 74 percent in the same period to 1.36 billion rupees, short of analysts’ 3 billion rupee forecast.

Steeper-than-expected slides in earnings at the New Delhi- based companies underscored the mounting financial challenges the nation’s real estate sector faces, with developers caught between a cash crunch and dwindling demand. An equities slump and the global credit contraction choked funding as property purchases slowed following a six-year rally in prices. “Real estate companies are in a ‘Catch-22’ situation where getting money incrementally is difficult,” said Jayesh Shroff, who helps manage $2 billion in equities, including DLF, at SBI Asset Management in Mumbai. “They’ll have to push for higher sales, and for that will need to sweeten the deal for buyers.”

DLF’s sales fell to 13.7 billion rupees during the quarter from 36 billion rupees a year earlier. That compared with the 33.7 billion rupee median estimate of analysts. Sales at Unitech fell to 4.9 billion rupees, compared with the 8.79 billion rupees forecast by analysts.

News Published Under:   Real Estate Developers |

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