Indian Hotels Company (IHCL), the country's second-largest hotel chain, on Friday posted a net profit of Rs 8.12 crore for the quarter ended September 30. It had posted a loss of Rs 6.30 crore for the corresponding quarter a year ago.
The company's return to the black can be attributed to higher occupancy levels across its properties, coupled with better revenue earned per room, compared to the same period last year.
Raymond Bickson, managing director, said, "Notwithstanding the foregoing, the company improved the average room sold per day by eight per cent and to that extent, the performance during the period, which is generally subdued because of the off season, was satisfactory." Income from operations grew by nine per cent to Rs 357 crore during th quarter as against Rs 328 crore posted in the same quarter a year earlier.
Company officials declared an overall room occupancy of 59 per cent and Rs 7,961 as average room rate during the quarter.
The company, a part of the Tata Group, gained a net amount of Rs 10.64 crore during the quarter as interest income on a deposit refund received following surrender of leasehold land in terms of a Supreme Court order on a disputed allotment in Noida.
The company, which will now increasingly rely on management contracts for expansion, said the business operations will be now be managed through internal accruals.
"We are not looking for any fund raising right now. The focus to bring down the debt will continue," said Anil Goel, director, finance.
The consolidated debt stood at Rs 3,400 crore, while the standalone debt figure stood at Rs 2,300 crore for the quarter. Its debt; equity ratio at the consolidated level was 1.1 and at the standalone level 0.79.
While a few properties it bought in the US, including the Pierre,are currently bleeding cash, company officials said special efforts were being taken to turnaround the operations.
"In 14-15 months, the international operations should be cash-positive. While properties in London, Sri Lanka and Sydney are doing good, the US properties are taking more time than we had anticipated,” said Goel.
As the hospitality industry enters the best period in its yearly business cycle, IHCL hopes to maintain occupancy of 80-90 per cent during the second half of the year. The company has taken an average price rise of 7-13 per cent starting October.
In all, 13 new properties are supposed to be added in this financial year with 1,840 rooms.
The company has also put forward plan of having one holding company for all international properties. In the next six to seven months, it should be able to roll out the plan after taking the required approval from stakeholders.
