Sept 11 shocks hit IHCL, Q3 profit plunges 83%

Mumbai, January 23: | Updated: Jan 24 2002, 05:30am hrs
The September 11 World Trade Center attacks in the US has resulted in a steep 83.37 per cent decline in the net profit of Indian Hotels Company Ltd (IHCL) for the quarter ended December 31, 2001 at Rs 6.01 crore as against Rs 36.15 crore for the same quarter last year.

According to IHCL, the attacks and its aftermath on the tourism industry have adversely impacted the company’s performance. Sales during the quarter have also taken a dip at Rs 131.03, crore as compared to Rs 194.57 crore for the corresponding quarter last year. Total income during the period stood at Rs 134.19 crore, as against Rs 200.02 crore for the same period last year.

Earnings per share for the third quarter period have also declined to Rs 1.33, as against Rs 8.01 for the corresponding period the previous year.

The company has stated that the financial results during the quarter for 2001 cannot be comparable to the corresponding period for the previous year since the company transferred its air catering business to a joint venture company with Singapore Airport Terminal Services, with effect from September 30, 2001.

The company added that while there was a drop in the revenue due to cancellation of bookings, significant cost savings of over Rs 15 crore were achieved due to various initiatives implemented by the company such as reduction in costs of raw materials, power and fuel and employee costs.

IHCL managed to maintain average occupancies during the quarter at 53 per cent, below the 65 per cent during the same quarter last year. Average room rent (ARR) during the quarter showed a decline to Rs 4,573 as compared to Rs 5,210 in the same quarter the previous year.

In a press statement, the company has said that consistent with the company’s objective of significantly improving its major properties and upgrading its service standards, substantial amounts have been invested in major renovations which, alongwith strategic acquisitions, have resulted in increased interest and depreciation costs.