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Indian Hotels reports Rs 5 crore profit for June quarter

, ET Bureau|
Aug 05, 2019, 09.41 PM IST
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New Delhi : Indian Hotels Company (IHCL) reported a profit after tax of Rs 4.98 crore in its consolidated financial results for the quarter ended June 30 this year, compared to a profit of Rs 9.10 crore in the corresponding period of the previous fiscal.

The company said the financial results reported were in line with the new accounting lease standards (Ind AS 116) effective April 1 2019.

IHCL reported revenue from operations of Rs 1020 crore for the quarter under review, up from Rs 979 crore in the corresponding period of the previous fiscal.

Puneet Chhatwal, managing director and CEO of IHCL, said despite the macro-economic headwinds, the company has stayed on track in delivering its promise as outlined in its Aspiration 2022 strategy. "The company reported a topline growth of 6% and an EBITDA growth of 32% . Margin expansion stood at 304 bps. Both the absolute EBITDA of Rs 166 crores as well as the EBITDA margin of 15.68% are the highest for quarter one for the last 10 years (on a like-to-like comparison pre IND AS 116). The company continued its growth journey by signing 7 hotels with 1267 rooms. It also opened 3 hotels in this quarter in key strategic markets like Goa and Agra.”

In a note IHCL's auditors said effective April 1, the group has adopted Ind AS 116 Leases and applied to lease contracts existing on April 1 across the group by electing retrospective approach with the cumulative effect at the date of initial application. Accordingly, comparative financial information has not been retrospectively adjusted and the group has taken the cumulative adjustment to retained earnings on the date of the initial application. The note further added that in the statement of profit and loss for the current quarter, the nature of expenses in respect of operating leases has changed from lease rent to depreciation on right of use asset and finance cost for interest accrued on lease liability using the effective interest method. Consequently, the finance costs and depreciation for the quarter is higher by Rs 38 crore and Rs 16.89 crore respectively with corresponding reduction in other operating and general expenses of Rs 44.79 crore. The note added that consequently, the company's profit before tax was lower by Rs 11.06 crore. The note also stated that other income for the quarter ended June 30 included Rs 24.50 crore towards gain on sale of residential flats by the parent company
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