Trans Asia Hotels PLC, the owning company of five-star property Cinnamon Lakeside Hotel, recorded negative profits for the quarter ended June 30, 2015 (1Q16), the interim financial accounts released to the Colombo bourse showed.

The company recorded a net loss of Rs.38.5 million for the quarter under review against a net profit of Rs.68.5 million in the same quarter of the previous year. The earnings per share deteriorated to 16 cents from 33 cents.

The revenue for the quarter fell 23 percent year-on-year (YoY) to Rs.444.4 million. As a result, gross profit also fell 35 percent YoY to Rs.215.8 million. The quarterly performance may have been affected by the partial closure of Cinnamon Lakeside from March 30, 2015 for undertaking urgent repairs. The repairs are expected to be completed this October. 

The annual report of the company said the refurbishment would cost Rs.415 million.

Meanwhile, despite the higher number of tourist arrivals to the country, the five-star properties are continuing to show weaker performances due to a vibrant informal accommodation sector which includes cheap guest houses, apartments and home stay units.

A brief segmental analysis showed that the hotel operations of the company contributing Rs.429 million in revenue while Rs.15 million from the investment property segment.

John Keells Holdings PLC is the single largest shareholder of Trans Asia Hotels PLC with a 48.64 percent stake while its subsidiary Asian Hotels and Properties PLC has 43.41 percent.

The third and fourth largest shareholder of the company are state-owned Bank of Ceylon with 2.65 percent and state-run private sector pensions fund the Employees’ Provident Fund (EPF) with 2.15 percent.