Indian Hotels Company Ltd (IHCL), the country’s second biggest in terms of room inventory, on Tuesday posted a net loss of Rs 6.4 crore for the quarter ended September 30, driven down by high operating costs and foreign currency fluctuations.
The company had posted a net profit of Rs 8.4 crore for the corresponding quarter last year.
Net sales for the reporting quarter stood at Rs 379 crore, an increase of six per cent over the same period last year of Rs 357 crore. The second and first quarters are considered to be the lean season for the hospitality business.
Raymond Bickson, managing director, said, "The sector continues to face pressure on demand due to the current economic environment, which in turn had kept the room rates subdued below desired levels in what is essentially an off-season period."
The company did not raise room rates during the first two quarters but said it could undertake a rise of five-eight per cent in the remaining two quarters. The company presently has 115 properties and 14,000 rooms.
The average occupancy levels, around 60 per cent in the first half, are expected to improve to 70 per cent in the remaining part of the year, also considered the better half. "There is going to be some pressure on the bottom line momentarily," said a senior executive.
The company refused to take any questions on the bid it had put to acquire Bermuda-based Orient-Express Hotels.
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"Since both companies are listed, we cannot comment on this matter until we see an official communication from the Orient-Express board," added Bickson.
However, the company amply its current debt:equity position was at a comfortable 1.1, which would allow it raise debt if need be.
At the stand-alone level the company's debt stood at Rs 2,800 crore and at the consolidated level it stood at Rs 3,800 crore.
"We wish to have 40 per cent of our revenue coming from the overseas market from one-third (about 33 per cent) now", added Bickson. Its three properties is the US are the biggest revenue generators but are not expected to turn profitable at least for the next 1-2 years.