Burdened by high debt, rising overhead costs due to capacity expansion and sluggish occupancy rates, Hotel Leelaventure reported a loss of Rs 142 crore for the quarter ended March 31, 2013.
In the corresponding year ago period, the hospitality firm had reported a net profit of Rs 210 crores, backed by a one-time inflow (exceptional item) of Rs 418 crore.
The luxury hotel’s total debt at the end of the March quarter stood at Rs 4,602 crore against Rs 4,235 crore during the same period last year. The opening of a new hotel in Chennai this January also led to the higher operating costs. Interest costs went up by seven per cent to Rs 123 crore this quarter as compared to Rs 115 crore in the corresponding period last year.
On a consolidated basis, the hospitality firm reported a net loss of Rs 433.49 crore in the year ended March 31, 2013, as against a net profit of Rs 18.62 crore in FY 2012. Raw material costs, employee expenses and other costs (power, oil and fuel) also saw a sharp jump in the March quarter from a year ago, again on account of the new Chennai hotel.
Earlier, the hospitality firm had told Business Line that its corporate debt restructuring is well on track and the company has roadmaps in place for attaining financial health, including disinvesting non-core assets. The company recently sold the commercial building (IT Park) next to its Chennai hotel to Reliance Industries Ltd for Rs 170 crore.
“We are selling plots of lands in Hyderabad and Pune. In Pune, we have a joint venture with a local developer for a residential complex. We are expecting Rs 150 crore from this development. We will get another Rs 150 crore from the joint development for a residential complex with Prestige Estates in Bangalore. Also, we will be raising Rs 1,000 crore through QIP (qualified institutional placement) or FCCBs (foreign currency convertible bonds) when the market improves,” Vivek Nair, Chairman and Managing Director of The Leela Palaces, Hotels and Resorts had said.
nivedita.ganguly@thehindu.co.in