Cinnamon Lakeside owner’s 3Q indicates city hotels’ recovery

Trans Asia Hotels PLC, which operates the five-star Cinnamon Lakeside hotel in Colombo, showed it is recovering from the aftershocks of Easter Sunday attacks, which eroded city hotel occupancies.

The John Keells group hotel reported earnings of Rs.53 cents a share or Rs.106.8 million for the October-December period (3Q20), slightly down from Rs.56 cents a share or Rs.112.6 million reported for the same period a year ago. 

The top line was Rs.753.4 million, down 6 percent year-on-year (YoY).

The hotel company made an operating profit of Rs.125.6 million during the three months, down 10 percent YoY.

Colombo city hotels which were recovering from supply glut and minimum room rates were hit by the Easter attacks in April 2019, plunging the segment into red. 

While the initial six months had been very tough, city hotels have recorded a relatively quick recovery.

The government also offered support to the tourism industry through a loan moratorium package and other concessions.

The caps on interest rates also may have supported the bottom lines of those who were leveraged. 

Sri Lanka Tourism this week set the ground work to kick off their long-delayed global promotional campaign with a five-year earnings target of US$ 10 billion.

Meanwhile, for the nine months ended December 31, 2019, Trans Asia Hotels PLC reported earnings of Rs.25 cents or Rs.50.8 million compared to earnings of Rs.217.3 million reported for the corresponding period in 2018.

The nine month revenue was Rs.1.7 billion compared to Rs.2.1 billion a year ago. Meanwhile, the company has settled its short-term loans and swapped them with long-term loans,  a move which is more beneficial in terms of cost. The overdraft was cut down to Rs.24.1 million from a high of Rs.103.9 million in March 31, 2019. 

As of December 31, 2019, John Keells Holdings PLC held 92.05 percent stake in the company. 

The state-controlled private sector pension fund, Employees’ Provident Fund held 2.15 percent being the fourth largest shareholder.