Taj commissions 60-room luxury floor, losses persist

Tal Lanka Hotels plc, owners of the Taj Samudra Hotel in Colombo, has commissioned a new luxury floor with 60 rooms in March this year and has also claimed that the renovated Golden Dragon Restaurant has established itself as the country’s leading Chinese Restaurant in its Annual Report ending March 31, 2015.

The year under review has seen the Company completing the USD 5 million second phase of renovation which included the luxury floor as well as upgrading the Samudra Ballroom to international standards "providing a new luxury experience for guests."

The Hotel had however posted a loss of Rs.180.8 million for the year, down from Rs. 530 million the previous year, although the Company’s Chairman has reported that revenues have returned to mere normal levels after completion of major renovation projects of the lobby, bar and three floors undertaken in 2013/14.

"However, room inventory of 60 keys, the Samudra Ballroom and Golden Dragon

remain closed for renovation for part of the current financial year which impacted revenue from these areas," Tal Lanka Chairman Rakesh Sarna said.

He reported that the USD 125 per room night minimum rate set in April 2011 remains unchanged. Several new hotels positioned as business travelers have opened in the three and four-star segments.

"With the increasing supply, hotel properties in the city have started positioning themselves across different value and price segments," Sarna said. "This will lead to increased arrivals in the long term and benefit the industry."

The owning Company with a stated capital of nearly Rs. 1.4 billion and a revaluation reserve of over Rs.1.5 billon carried accumulated losses of slightly over Rs. 1.31 billion in its books. Total assets ran at Rs. 4.79 billion and total liabilities at nearly Rs.3.2 billion.

The Company’s loss for the year under review translated to a loss per share of Rs. 129 down from Rs. 380 a year earlier. Net assets per share stood at Rs.11.44, down from Rs. 12.81 the previous year.

A Tal share rated at a high of Rs. 38 and a low of Rs. 25.40 during the year under review against a trading range of Rs. 32 to Rs. 24 the previous year.

Tal Hotels and Resorts Ltd with 58.14% and the Indian Hotels Company Ltd with 26.2% are the major shareholders of the owning company. The ETF with 5.33% is the third largest shareholder. Several local corporate entities and individuals are also among the top 20 shareholders of but owning less than 1% of the Company each.

The Directors of Tal Lanka Hotels plc are Messrs R.K. Sarna (Chairman), A.P Goel, D.K Chaudhary, Russel de Mel, R.K Chaudhary, Tilak de Zoysa, G. Sundaram, V. Govindasamy, S. Joshi, P. Verma and U. Narain.

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