The Tatas-controlled Indian Hotels has reported a increase of 3 per cent in net profit from Rs 113.23 crore to Rs 116.79 crore for fiscal 2000-01. Sales and operating income rose 14 per cent to Rs 687.50 crore as compared with Rs 630.47 crore last year.
In view of its centenary year, the company has declared a dividend of Rs 10 per share. The rise in profit is primarily due to good performance in the fourth quarter, in which the company reported a growth of 20 per cent in profit after tax. Its net profit for the first nine months (April-December 2000) fell 4 per cent to Rs 70.33 crore as against Rs 73.3 crore last year.
The performance in the fourth quarter was achieved due to reduction in operating costs, especially in food & beverage costs and staff costs. Staff costs was down by 6 per cent to Rs 33.18 crore as compared with Rs 35.32 crore in the corresponding fourth quarter last year.
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Due to investments in upgradation of property and acquisitions, interest costs rose by 100 per cent to Rs 31.15 crore compared with Rs 15.54 crore last fiscal. Depreciation also increased by 20 per cent to Rs 45.16 crore in 2000-01 as against Rs 37.69 crore last year. Because of this, the net profit has been adversely impacted.
During the year, the company had an outgo of Rs 3.53 crore on account of voluntary retirement schemes at major properties. This resulted in a reduction in manpower strength by about 1,200 employees.
The company completed the first phase of its renovation programme covering most of its major properties. These renovations are expected to improve the company's position and enhance future performance.