Unitech suffers double blow as revenues & profit dip 50%

Unitech suffers double blow as revenues & profit dip 50%
The Economic Times, November 01, 2009, Page 3

ET Bureau, NEW DELHI

India’s second largest property firm Unitech on Saturday said it would continue to focus on lower-priced homes to drive sales in the coming quarters, even as it reported a 50% decline in both revenues and profits for the September quarter, over the year ago period, on the back of property slump that started last year.

The company, which was on the verge of collapse early this year due to its huge debt burden in a market where demand for properties had dramatically declined, said it has reduced its total debt by a fourth this fiscal.

Unitech raised $900 million by selling fresh shares to institutional investors in two tranches between April and July to infuse the much-needed liquidity and partly repay debt. As of September 30, Unitech had Rs 740 crore in cash and bank balance and a total loan outstanding of Rs 6,659 crore, the company said in a statement.

The Gurgaon-based realty company’s net profit for the September quarter was Rs 178 crore and net sales at Rs 509 crore was down 48% from the year-ago period.

Unitech said it received bookings for over 10 million sqft of residential space worth Rs 4,000 crore across Gurgaon, Noida, Greater Noida, Chennai, Kolkata, Mumbai, Bhopal, Lucknow and Mohali in the first six months of this fiscal. It has launched a total of 30 new projects comprising 21 million sqft of space since April.

Unitech MD Sanjay Chandra said, "Encouraged by the strong response (to lower-priced homes), the company plans to offer similar product in other cities." The company had launched homes in the price range of Rs 10-25 lakh across six cities under UniHomes brand earlier this fiscal.

Unitech has also ramped up construction activity at various project sites and currently has over 60 projects under execution, Mr Chandra said, adding that workforce employed at project sites has increased nearly five-fold to 16,000 in six months.