On Wednesday, India’s largest real estate company, DLF Ltd. released the results of its first-quarter (Q1) that ended on 30th June. The company recorded a consolidated net loss of Rs. 72 crores during the said quarter. However, the company recorded a consolidated net profit of Rs. 414 crores in Q1 FY20.
The company’s net income declined by 65 percent sequentially to finally stand at Rs. 646 crores in Q1 FY21. On an annual basis, the total income dropped by 58 percent as against Rs. 1,541 crores in Q1 FY20.
Meanwhile, the consolidated revenue collection of the DLF Group fell to Rs. 549 crores as compared to Rs. 1,331 crores during the same period last year.
However, DLF Cyber City Developers (DCCDL) recorded a total revenue collection of Rs. 929 crores accompanied with a net profit of Rs. 160 crores in Q1 FY21.
Commenting on Q1 numbers DLF Ltd. said “As per the accounting standards and our revenue recognition policy, revenue is recognized at the time of handing over possession to customers. Issuance of possession letters got adversely affected during the lockdown. Consequently, financial results were impacted during the quarter Q1 FY21”.
Possible Reasons for the Loss
There are a number of factors involved in this fall in the Q1 numbers. Some of them are as follows:
- The coronavirus outbreak followed by stringent lockdowns in different phases disrupted the construction activities and adversely impacted mall operations.
- The COVID-19 pandemic impacted most part of June, taking the numbers too low when compared with earlier quarter results.
- The company’s rental business was mainly impacted due to complete shutdowns and consequent rental waivers
What DLF is doing to overcome this loss?
The company is reducing overhead costs, enabling improvement of margins, and it is tightly managing the cash flow.
Meanwhile, malls have begun opening up, giving some signs of gradual recovery.
During its last quarter (Q4FY20) also the company had reported a net loss of Rs. 1,867 crores because of one-time exceptional provision and a one-time DTA reversal on the adoption of a lower tax rate.