New Delhi: Real estate developer Unitech’s consolidated net profit slumped 98% to R2.26 crore for the quarter ended March compared with the corresponding period last year amid slowing home sales and rising borrowings costs.
Mirroring the current slowing sales, Unitech’s sales also dropped by 32% to R716 crore for the January to March period compared with the same period last year. The country’s real estate sector has been hit by 13 episodes of interest rate hike since March 2010 and October 2011 that pushed home loan rates up steeply, deterring consumers. Due to the conditions, total income from operations of the country’s third largest developer by market value also fell to R716.07 crore in the last quarter of the 2011-12 fiscal year from R1,054.26 crore last year.
Unitech had posted a R102.5-crore net profit for the same quarter last year. Meanwhile, the company said its profit for the entire fiscal plummeted to R248.30 crore from R567.66 crore a year ago while income from operations declined to R2,446.58 crore from R3,186.87 crore in 2010-11. Tepid demand in residential sales resulted in drying up of funding for various real estate projects as banks were wary of lending to the sector and private equity players maintained a safe distance.
“Fiscal 2011-12 was a very challenging year, particularly in terms of availability as well as cost of funding for real estate projects. This has resulted not only in an increase in financing costs for the company but also adversely affected the construction activity during the year,” Ajay Chandra, Unitech’s managing director, said. “There has been a gradual improvement in availability of funding in the recent months and the outlook on the interest rates is also benign. We expect the year 2012-13 to be significantly better,” he added.
The Budget also added to the sector’s woes with input cost going up due to hike in excise duties. Unitech’s costs as a percentage of sales rose to 97% during the quarter, up from 84% in the same period a year previously.
Unitech had posted a R102.5-crore net profit for the same quarter last year. Meanwhile, the company said its profit for the entire fiscal plummeted to R248.30 crore from R567.66 crore a year ago while income from operations declined to R2,446.58 crore from R3,186.87 crore in 2010-11. Tepid demand in residential sales resulted in drying up of funding for various real estate projects as banks were wary of lending to the sector and private equity players maintained a safe distance.
“Fiscal 2011-12 was a very challenging year, particularly in terms of availability as well as cost of funding for real estate projects. This has resulted not only in an increase in financing costs for the company but also adversely affected the construction activity during the year,” Ajay Chandra, Unitech’s managing director, said. “There has been a gradual improvement in availability of funding in the recent months and the outlook on the interest rates is also benign. We expect the year 2012-13 to be significantly better,” he added.
The Budget also added to the sector’s woes with input cost going up due to hike in excise duties. Unitech’s costs as a percentage of sales rose to 97% during the quarter, up from 84% in the same period a year previously.
Source:www.financialexpress.com
No comments:
Post a Comment