The company's turnover decreased to Rs 120.97 crore in 1998-99 from Rs 130.37 crore in the previous year.

The board of directors of the company, which took on record the financial results on Thursday, has recommended a 50 per cent lower dividend of Rs 1.50 per share during the year compared to Rs 3 per share in 1997-98

The earnings per share (EPS) has almost halved to Rs 3.95 from Rs 8.57 in the previous year.

The company attributed the poor performance to the Asian crisis and the slowing down of the global economy, coupled with the sluggish Indian economy which affected the hospitality industry as a whole.

The company's expenditure increased to Rs 96.75 crore in 1998-99 from Rs 90.68 crore in the previous year. The gross profit fell to Rs 20.77 crore from Rs 35.72 crore in the previous year while the profit beforetax was Rs 13.40 crore from Rs 29.48 crore in the previous year.

The foreign exchange earnings of the company also dipped to Rs 69.32 crore from Rs 76.27 crore in the previous year.

ITC Hotels' net profit dipped to Rs 7.68 crore for the quarter ended March 31, 1999 as compared to Rs 11.79 crore in the corresponding quarter of the previous year. The turnover dropped marginally to Rs 38.24 during the last quarter as against Rs 38.94 in the previous year.

Gross profit was down to Rs 10.71 crore from Rs 14.79 crore in the previous year. Foreign exchange earnings during the last quarter also dipped to Rs 24.84 crore as against Rs 28.19 crore for the same period in the previous year.

According to a company spokesperson, ITC Ltd is optimistic in the long run of the economic revival and consequent brighter prospects. "The new tie-up with the Ansal group, the two super-deluxe hotels planned in Mumbai and Calcutta and the added expansion at the group's flagship Maurya Sheraton as well as the planning of anotherhotel in Mumbai is an indication of our confidence of a buoyant future," the spokesperson added.

ITC Hotels will achieve Y2K compliance by September 30, 1999 for which it has spent about Rs 1 crore. A contingency plan is also being developed to minimise the risk of disruption to the operations of the hotels, the spokesperson added.