Ceylon Hotels Corp. part sells Maldivian resort owning company for $ 4.5 m

Ceylon Hotels Corporation PLC (CHOT) Group has part sold the Maldivian resort owning company for $ 4.5 million (over Rs. 1.6 billion).

The stake amounting to 50% ownership in Handuvaru Ocean Holidays Ltd. (HOH) held by Ceylon Hotels Maldives Ltd. (CHML) had been sold to China Travel International Investment Hong Kong Ltd.

CHML is a fully owned subsidiary of United Hotels Company Ltd., 67.51% ownership of which is held by CHOT. 

The impending transaction was first announced in CHOT’s Annual Report for FY22. “This transaction when completed will further enhance the asset position of the Group,” CHOT Chairman Lakshman Samarasinghe said. CHOT share price yesterday gained by 70 cents or 4% to close at Rs. 16.50.

United Hotels Company in FY22 recorded a total revenue of Rs. 309.4 million for the financial year under review compared to Rs. 136.9 million recorded the previous year. UHC recorded an operating loss of Rs. 66 million for the financial year ended 31 March 2022, compared to an operating loss of Rs. 132.6 million recorded last year. A notable improvement in results during the year, where the company returned to positive EBITDA during the financial year under review at Group level.

Parent CHOT in FY22 returned to positive EBITDA during the financial year under review at Group level and at most of the Hotel owning subsidiaries/joint venture undertakings. Consolidated Earnings before Interest, Tax, Depreciation/Amortisation amounted to Rs. 43 million compared to negative cash earnings of (Rs. 40 million) last year.

It closed the year with a consolidated net loss after tax of Rs. 46 million on a revenue of Rs. 561.9 million compared to a consolidated net loss of Rs. 385.2 million recorded during the previous year on a revenue of Rs. 423.6 million. Consolidated Finance Income increased by 262% to Rs. 429.3 million during the year under review, compared to Rs. 118 million recorded the previous year, and included a net exchange gain of Rs. 335 million arising from the revaluation of foreign currency denominated cash reserves of the group, as a result of the depreciation of the rupee (compared to the dollar) from Rs. 199 at 1 April 2021 to Rs. 299 as of 31 March 2022.

Loss from Operations (before finance cost/income and tax) amounted to Rs. 165.5 million in FY22 compared to Rs. 223.9 million recorded the previous year.

CHOT also owns 69.5% stake in Kandy Hotels Co 1938 PLC, and the Group includes Suisse Hotel, Ceylon Holiday Holdings Ltd., Tissa Resort and CHC Rest Houses.

Young hotelier Sanjeev Gardiner-controlled Ceylon Hotels Holdings Ltd., and related parties own 60% stake in CHOT and other shareholders include EPF (12%), Rosewood Ltd., 10.4%, and AARC Capital Ltd. (6%).