Strong revenue growth helps The Kingsbury to cut 3Q losses

• City hotels look to benefit from recovery in tourism and normality in conditions 

Providing a glimpse of how Colombo city hotels fared in the final three months of last year, The Kingsbury PLC reported solid growth in revenues although it failed to pull itself off to the black as of yet, although the performance helped to cut losses. 
The company, a unit of Hayleys Group, reported revenues of Rs.1.19 billion in the three months to December 2022 (3Q23), up 67 percent from the same period in 2021.
The revenue appears to have been cushioned by the continuous monthly uptrend seen in travellers to Sri Lanka as the economy was trying to find some semblance of normalcy after the economic, political and social upheaval in the first seven months of the year. 

Last week, Krishan Balendra, the Chairman of John Keells Holdings PLC which also runs a chain of city hotels under Cinnamon brand said they were witnessing gradual improvement in travel business and an increase in restaurant and banqueting activity as people were slowly beginning to return to restaurant dining, corporate and other functions.

Last week, Krishan Balendra, the Chairman of John Keells Holdings PLC which also runs a chain of city hotels under Cinnamon brand said they were witnessing gradual improvement in travel business and an increase in restaurant and banqueting activity as people were slowly beginning to return to restaurant dining, corporate and other functions.

Tourism appears to be making a strong return to become a bright spot in the Sri Lankan economy after two years of pandemic restrictions followed by the crash of the economy.
Tourist arrivals to Sri Lanka in January crossed 100,000 for the first time in at least a year. It is of paramount importance for Sri Lanka to stay the course on its economic reforms process, political stability and social calm to ensure the tourism trade remains on track to gain fast recovery.     
However, the soaring inflation weighed on The Kingsbury’s business as its direct costs rose by 56 percent during the quarter under review while other overhead costs followed suit with administrative costs and marketing expenses rising by 57 percent and 25 percent respectively.

The company returned to an operating profit of Rs.66.8 million in the quarter compared to a loss of Rs.9.6 million in the corresponding quarter in 2021. 
The Kingsbury reported negative earnings of 7 cents a share or Rs.42.0 million net loss compared to a loss per share of 12 cents or Rs.49.1 million loss in the same period a year ago. 
The company felt the pressure from the soaring interest rates as the finance cost shot up to Rs.110.5 million from Rs.39.7 million. 

It said it is judiciously managing its working capital via minimising borrowings and fixing the short-term rates on working capital facilities for the long term to blunt the full impact. 
Hayleys group via Hayleys PLC and Carbotels (Pvt) Limited holds 59.48 percent stake in The Kingsbury while Dhammika Perera holds 1.33 percent stake in the company directly. 
The Employees’ Provident Fund has 10.56 percent in the company being the second largest shareholder after Hayleys Group.