The Indian Hotels Company (INDHOTEL) Q4 02/03 earnings summary

Executive summary

• FY03 total income was ₹590.64 crore; hotel operating profit was ₹110.18 crore, while PBT and PAT fell as prior-year results included substantially higher one-off business-sale income.

• Demand was hit by India travel advisories, the Iraq war and SARS; domestic business travel and leisure demand helped cushion the impact.

• Growth priorities included asset-light management contracts, portfolio repositioning, new hotel products and tighter cost controls.

Financial highlights

• Total income ₹590.64 crore vs ₹601.88 crore; hotel-operation income rose 10% on a comparable basis excluding prior-year air-catering income.

• PBT ₹53.80 crore vs ₹98.14 crore; PAT ₹40.48 crore vs ₹80.70 crore, reflecting prior-year ₹88.99 crore air-catering sale profit.

• PBT excluding asset-sale gains rose from ₹26 crore to ₹39 crore; operating profit from hotels was ₹110.18 crore, up 8%.

• Consolidated income was ₹894.74 crore vs ₹826.97 crore; consolidated PAT after minority interest and associates’ share was ₹28.07 crore vs ₹21.80 crore.

Outlook and guidance

• FY04 hotel demand was expected to improve with business and domestic leisure travel, stronger economic activity and limited new metro supply, subject to no major disruptive events.

• Wellington Mews serviced apartments were expected to launch in FY04 Q4; a value-focused hotel concept was in prototype development.

• TOP initiatives identified ₹30 crore of potential annual improvements; the stated aim was ₹12 crore to the bottom line in FY04, with remaining gains expected the following year.

• Management targeted one-third of revenue from international properties within five years and EVA-positive performance in 3–4 years.