Tal Lanka Hotels PLC (TAJ) which operates Taj Samudra Hotel Colombo remained in the red for the quarter ended June (1Q16) with a net loss of Rs.37.97 million, but narrowed the losses from Rs.84.7 million it incurred during the same quarter of the previous year.
It is possible that TAJ is on the road to profitability following the continuous renovation carried out outlined by the management in the 2013/14 annual report.
However, the current price competition could be hampering potential revenue similar to the situation faced by other 5-star properties in the country.
Revenue increased 31 percent yoy to Rs.549.74 million, while cost of sales went up 14 percent yoy to Rs.464.84 million. Gross profits increased 275 percent yoy to Rs.84.90 million.
Unlike competitors, accommodation remained the biggest contributor to revenue with a 58.08 percent share while food and beverage formed 38.66 percent of the TAJ business with the rest attributed to shop rentals.
Accommodation receipts grew by 30 percent yoy while food and beverage revenue grew by 40 percent yoy.
Marketing expenses increased 25 percent yoy to Rs.20.92 million and finance costs increased 53 percent yoy to Rs.35.44 million while administrative expenses remained constant.
Assets increased slightly to Rs.4.86 billion from Rs.4.79 billion as at March 2015 (4Q15).
The stated capital remained at Rs.1.4 billion, while the accumulated losses increased to Rs.1.33 billion from Rs.1.31 billion in 4Q15.
Long and short term borrowings increased marginally from Rs.2.50 billion in 4Q15 to Rs.2.57 billion in 1Q16, while amounts payable to group companies doubled in the same period from Rs.164.15 million to Rs.317 million.
TAL Hotels & Resorts Ltd owned 58.14 percent of shares in TAJ while the Indian Hotels Company Limited owned 24.62 percent.
State-run private sector pensions fund Employees’ Provident Fund, EPF owned 5.33 percent of the shares.
