The Indian Hotels Company (INDHOTEL) Q4 99/00 earnings summary

Executive summary

• FY1999-00 gross revenue rose 2% to Rs. 618.42 crore despite difficult trading; PBT fell 15% to Rs. 130.73 crore and PAT fell 5% to Rs. 113.23 crore.

• Results reflected softer occupancy and room rates early in the year, higher depreciation and interest costs, and a modest recovery in the final two quarters.

• Strategic priorities included extensive hotel renovations, technology upgrades, employee development and repositioning key properties in the luxury market.

Financial highlights

• Total income was Rs. 618.42 crore versus Rs. 603.49 crore; room income declined 5% YoY, while Food & Beverage income increased 4%.

• PBT was Rs. 130.73 crore versus Rs. 154.14 crore; PAT was Rs. 113.23 crore versus Rs. 119.14 crore, after an additional Rs. 10 crore prior-year tax provision in FY1998-99.

• Depreciation rose to Rs. 37.69 crore from Rs. 33.84 crore; net interest charges increased to Rs. 15.54 crore following major project and acquisition completions.

• Operating cash flow was Rs. 79.61 crore versus Rs. 75.70 crore; investing activities used Rs. 294.98 crore, primarily reflecting fixed-asset and investment purchases and loans to subsidiaries.

Outlook and guidance

• Better results were expected in FY2000-01 based on stronger third- and fourth-quarter trends, subject to no major adverse economic or political developments.

• Hotel renovations were expected to intensify; Phase I was targeted for completion during FY2000-01 and was to be funded substantially from internal accruals.

• Dubai's 258-room luxury hotel was expected to open in early 2001; negotiations were also underway for projects in the Middle East and U.S.

• City forecasts indicated higher room volumes in the year-to-date period, while average room rates were lower in Mumbai, Delhi, Calcutta and Chennai than the prior-year comparison.