MUMBAI, June 22: Hotel Leelaventure has posted a 5.6 per cent fall in net profit to Rs 42.59 crore for the year ended March 1998, as compared with Rs 45.15 crore last year. Sales fell by 13 per cent to Rs 117.33 crore from Rs 134.78 crore. The board of directors announced a dividend of Rs 3.50 per share, down from Rs 4 in 1997.Foreign exchange earnings totalled Rs 101.62 crore, lower than the figure of Rs 110.13 crore in the previous year. A company release says the recent devaluation of the rupee has helped boost revenue.
Company managing director Vivek Nair told The Financial Express that results had been affected by the closure of the Goa property which effectively functioned for 45 days. The tax on dividend was another contributing factor, he added.
Gross profit for the year dropped 11 per cent to Rs 55 crore, against Rs 61.78 crore. Expenditure was down to Rs 58.21 crore from Rs 68.15 crore as also depreciation and provision for taxation at Rs 6.48 crore (Rs 9.16 earlier) and Rs 5.10 crore(Rs 6.75 crore).
The release says that the hotel has maintained 67 per cent occupancy with an average room rate of about Rs 8,000. The yield per room was about Rs 5,264.
The financial results include revenue generated from the Goa resort for a five-week period. The resort, which was closed for upgradation, will be opened for public use shortly. The company's expansion plans, including the 200-room luxury hotel in Bangalore, are progressing as per schedule.
Insight -- In line with expectations
Hotel Leelaventure's results for the 12 months ended March 1998 are in line with expectations. Given a canvas of operating a single property, with the other in Goa undergoing renovation, has not helped. In fact, lower room availability and stagnant average room rates (ARRs) have affected performance. This has been worsened by the dip in tourist and business arrivals which has led to lower occupancy levels in Mumbai.
Commensurately operating profits have also dropped 10.6 per cent to Rs 56.09 crore withoperating margins reducing from 49.07 per cent to 47.93 per cent.
Given this operational performance, bottomline has also taken a beating. For the future, with international tourists opting for decidedly cheaper holiday options in south-east Asia, tourist arrivals and as a corollary occupancy levels could remain depressed. This is clearly reflected in the Hotel Leeaventure stock which is currently trading precariously close to its 52-week low of Rs 42.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
