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Last Updated : 2024-04-20 08:36:00
Trans Asia Hotels PLC, a unit of John Keells group, which owns the 5-star Cinnamon Lakeside Hotel posted net profit of Rs.81.8 million for the quarter ended December 31, 2015 (3Q16), down 53 percent from the same quarter a year ago, the interim results showed.
The company’s top-line narrowed, expenses rose and fresh borrowings resulted in heavy finance costs opposed to a finance income during the corresponding quarter last year. The revenue fell by 11 percent year-on-year (yoy) to Rs.703.3 million. Commenting on the leisure sector, John Keells Holdings group Chairman Susantha Ratnayake highlighted the decrease in occupancy levels in Colombo city hotels due to increased supply and the lower volumes generated through corporate and Meetings, Incentives, Conferences, and Exhibitions (MICE) segment
Other operating income fell to just Rs.9, 000 from Rs.1.32 million recorded in the corresponding quarter last year. Out of the costs, only the administrative expenses declined by 2 percent yoy to Rs.170.7 million but both distribution and other operating expenses rose by 44 percent and 31 percent respectively, to Rs.52.9 million and Rs.108.9 million.
As a result, the operating profit fell by 56 percent yoy to Rs.86.9 million. Another notable item in the company’s balance sheet was the fresh long term borrowings of Rs.432.75 million. The company paid dividend amounting to Rs.400 million, the cash flow statement showed. This was besides the over draft facilities which rose by over 3-times to Rs.199 million during the nine months to December 31, 2015.
This resulted in a finance cost of Rs.2.1 million, resulting in Rs.1.46 million net finance cost. This is against Rs.7.7 million net finance income during the corresponding quarter last year. This is due to finance income falling to just under Rs.650, 000 from Rs.7.8 million as the company sold its Rs.236.6 million short term investments. Cash balance also fell sharply to just under Rs.78 million from Rs.232.7 million on March 31, 2015. Meanwhile, the hotel company invested Rs.568.5 million during the nine months to refurbish a section of the hotel property. Since the establishment in 1985, the hotel re-invented its identity from Ramada Renaissance to Trans Asia Hotel and in 2009 to Cinnamon Lakeside Colombo.
The company has a net asset per share of Rs.26.99. The company was also liable for super gains tax of Rs.202.5 million. Meanwhile, for the nine months ended December 31, 2015 the company posted a net profit of Rs.11.8 million, down 97 percent yoy. The revenue declined 20 percent yoy to Rs.1.66 billion. As of December 31, 2015, JKH held 48.64 percent stake in the company followed by 43.41 percent by Asian Hotels And Properties PLC and 2.66 percent by Bank of Ceylon A/C Ceybank Unit Trust. The state-controlled private sector pension fund, the Employees’ Provident Fund held 2.15 percent stake being the fourth largest shareholder.
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