Dinesh Gupta, chief operating officer, Ansal Properties told CNBC-TV18 that some extraordinary events have led to losses.
Real estate player Ansal Properties, for the first time ever posted a net loss of Rs 21.01 crore in Q3FY12 against net profit of Rs 32.4 crore, seen a year ago. Its revenue slipped 37% year-on-year, to Rs 214.2 crore as against Rs 338.7 crore.
Dinesh Gupta, chief operating officer, Ansal Properties told CNBC-TV18 that some extraordinary events have led to losses. Complying with corporate governance norms was one of them. It surrendered excess land in Gurgaon and also re-valued its sales downwards in UP, which resulted into losses.
The company is confident of achieving sales guidance of 18 million sq ft, however, it feels that achieving revenue guidance of Rs 1,500 crore is not likely.
"For the full year, we give a target of about 21 million square feet and considering 16.5 million square feet by end of quarter three," he added.
Below is the edited transcript of Gupta's interview with CNBC-TV18. Also watch the accompanying video.
Q: For a company that has never posted losses, what was it that dragged down your performance to this extent this time?
A: This is not an apple to apple comparison either on quarter basis or on a year on year basis. There have been some extraordinary events which have led to reduction in profit and posting of losses. I would like to state two important factors with couple of examples; keeping the ethos of the corporate governance very high and making sure that transparency is at the top, we have taken these decisions and results have been slightly disappointing because of that.
The company has been in a consolidation phase for the couple of quarters. The philosophy of trading between short pain versus long gain has been the philosophy. Let me give you two prime reasons for the losses that have been posted in the quarter. In one of the land parcels in Greater Noida, the company has surrendered excess land close to about 34 acres and because of this surrender there is a certain loss, which has been taken in the quarter.
But, the biggest factor is that because of the surrender the company has saved on unpaid land cost close to Rs 200 crores, which is much more important than a short term loss. So, Rs 200 crores which is saved as an unpaid land cost will be utilized by the company for other operations. We will make sure that development of other townships progress well.
The other factor is, in one of the townships in UP there has been a revision in estimates in the land cost. Because the land parcels are acquired by us in bits and pieces, there is never a consolidated piece that the company goes on to acquire. So, there has been a revision in the land cost due to which there has been some sales reversal. Due to lowering of percentage of completion method and the exact quantum is about Rs 48 crores of sale reversal and an equivalent amount of profit reversal.
No cost reversal has been taken into account, but only profit reversal has taken place. If I take both these examples, on a apple to apple comparison basis, we would have been able to give you a profit of close to about plus Rs 20 crores rather than a loss of about Rs 21 crores. So, this is inline with the corporate governance and whatever has to be done we have to do it. Keeping the accounting standards in mind reversal have been taken into account. So, this is a one time hit, which should be taken positively.
Q: In that case give us an idea of what you may do for full year FY12? You did Rs 1000 crore revenues in FY11 and your profit was Rs 76 crores. What kind of a run rate can we expect if we iron out these quarterlies?
A: We have been discussing internally and even in quarter four since the costs have been revised in the past one year, in the next couple of days we will be looking at cost revision in certain other projects. So, it would not be prudent for me to give any guidance right now. But by end of February we should be able to we give a better target and a better estimate about the topline and the bottomline for the full year.
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