Real estate company DLF Ltd has posted nearly 13 per cent drop in its consolidated net profit for the June quarter at Rs 358.3 crore. The first quarter bottomline performance was weighed down by higher land cost, development rights as well as a 28-per-cent increase in finance charges.

The company said that successive interest rate hikes by the RBI will have a moderating impact on overall demand in the sector.

For quarter ended June 30, 2011, DLF's other income dropped sharply to Rs 57.4 crore from about Rs 132 crore in the year-ago period.

The consolidated revenue (sales and other income combined) stood at Rs 2,503 crore, up 16 per cent over the corresponding period in the previous year.

The EBIDTA rose five per cent year-on-year to Rs 1,168 crore. The company said that it had witnessed a “stable beginning” for the fiscal despite the ongoing “difficult environment”.

“Given our successful launches of plotted developments, we continue our strategy of focusing on this product segment which enables us to mitigate the current inflationary environment and at the same time accelerate our cash flows,” Mr Ashok Tyagi, Group Chief Financial Officer of DLF, said in a statement.

He further said that while debt levels have remained similar to the previous quarter, the momentum on the non-core asset/business divestments have gathered pace. “These coupled with operational cash flows will help the company in moderating the current debt levels,” he added.

DLF said it got Rs 165 crore from divestment of non-core assets. It may be recalled that in the fourth quarter of FY11, the net debt - a key monitorable for investors – has touched Rs 21,424 crore.

“Our execution commitments for the year remain on track with substantial volumes upcoming for handover to customers. This will further reduce our construction commitments…,” Mr Tyagi added.

> moumita@thehindu.co.in

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