Hospitality company Hotel Leelaventure has posted net loss of Rs 26.49 crore for the first quarter ended June 30, 2011. During the three-months ended June 30, 2010, the company’s net profit was Rs 9.24 crore.
“The company has incurred a loss mainly due to the impact of interest and depreciation on account of opening of The Leela Palace, New Delhi,” it said in a statement. The firm’s net sales for the first quarter of the current fiscal increased 14.18 per cent at Rs 124.72 crore, compared to Rs 109.23 crore in the same quarter last fiscal.
Commenting on the results, Hotel Leelaventure Vice- Chairman and MD Mr Vivek Nair said : “The Leela Palace, New Delhi is expected to stabilise its operations with the opening of its new restaurants ‘Le Cirque’ and ‘Megu’ and when the ensuing peak season sets in”. Also, a part of The Leela Goa is under renovation and hence, the overall profitability of the company has been affected, he said. “The revenues would substantially improve with the stabilisation of the Delhi hotel in the second half of the year and the re-opening of the Goa resort in November, 2011,” he added.
After the close of the quarter, a promoter group company has acquired 33,14,725 (0.85 per cent of the paid up capital) shares through open market purchases, it said in a filing to the Bombay Stock Exchange. Hence, the promoters holding as on date stands at 21, 77, 85, 345 shares constituting 56.16 per cent of the paid up capital of the company.
Meanwhile, there have been reports that The Leela Group is set to sell its marquee property in Kovalam, a famous beach on the outskirts of the capital of Kerala, as part of an ongoing exercise to ease its debt burden. The property, Leela Resorts Kovalam, is being sold for 500 crore to NRI Ravi Pillai.
The deal, however, will not result in Leela exiting the property completely. It will enter into a management contract with Pillai to manage the property for 30 years. The trigger for the sale of the property, which was originally developed by state-run ITDC and has a commanding view of Arabian Sea, was the need to reduce debt. However, Hotel Leelaventure Ltd has clarified that the Company has not entered into any agreements for sale or for management for any of its properties.