IHCL posts 22 per cent decline in net profit for December quarter
28 Jan 2010
Indian Hotels, the owner of the Taj Group of luxury hotels, reported a 22 per cent drop in net profit for the quarter ended 31 December at Rs64.9 crore, due of poor recovery in the international markets in which the company operates, as also due to the non-functional premier rooms of the Taj Mahal Palace and Tower, Mumbai.
The company had reported a net profit of Rs83.85 crore in the same quarter a year earlier. Indian Hotel shares closed 6.1 per cent lower at Rs90.80 on the Bombay Stock Exchange (BSE), as against its Monday close of Rs 96.70.
Income from operations for the quarter was also lower at Rs422.3 crore, a 2-per cent decline as against Rs430.3 crore in the corresponding quarter a year ago.
Total income fell by 4 per cent to Rs437 crore while total expenditure was down marginally by 0.6 per cent at Rs312 crore during the same period. For the first six months, IHCL's net profit stood at Rs126 crore, down by 52 per cent.
Though signs of recovery are evident in India, many of the key international markets in which the company operates remain depressed. According to Anil P Goel, executive director - finance, IHCL, with the opening of the Pierre in New York, IHCL was focused on improving the operations of its three hotel portfolios in the US market. He added the company was also putting a tight control on its operation costs to secure margins.
For the hotel industry the third quarter is known to be the busiest as both leisure and corporate travels peak. In December 2009, most premier hoteliers reported more than 75 per cent occupancy with room rents staying substantially unchanged.
