Renuka City Hotels ends 9-month positive despite tough 3Q
Tuesday, 21 January 2014 00:01
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Well-managed yet low profile Renuka City Hotels Plc has succeeded in finishing the first nine months of financial year 2014 on a positive note despite facing a tough third quarter.
Among first corporates to release December earnings last week, Renuka City Hotels Plc (RCH) had posted a net profit of Rs. 244.4 million in the first nine months of 2013/14 FY, up by 5% over the corresponding period of last year.
Revenue grew by 28% to Rs. 208 million whilst gross profit improved by 28% to Rs. 183 million. A hefty Rs. 150 million by way of other operating income though down by 7% over 2012/13 FY, boosted earnings before expenses by 9% to Rs. 333.4 million.
Despite increases in salaries and related expenses, administrative and marketing expenses, profit from operations in the first nine months amounted to Rs. 253.7 million, almost same as a year earlier. Improved bottom line as at end December 2013 was despite a tough third quarter.
RCH’s net profit for three months ended on 31 December 2013 was Rs. 64.5 million, down by 21% over the corresponding period of the previous financial year. Pre-tax profit was down by 24% to Rs. 67.4 million.
Nevertheless, RCH had enjoyed revenue growth of 41.4% to Rs. 79 million whilst gross profit was Rs. 69.3 million, up by 45% over the third quarter of FY13. The company has witnessed a 68% dip in other operating income to Rs. 18 million resulting in earnings before expenses of Rs. 87.4 million, down by 16% from Rs. 103.5 million in 3Q of last FY.
In the second quarter RCH’s pre-tax profit rose by a substantial 90% gain to Rs. 101.7 million over the corresponding period of last FY. Impressive performance in the 2Q helped boost first half pre-tax profit to Rs. 186 million, up by 10% over the first half of FY13.
Meanwhile net asset per share crossed the Rs. 500 mark to finish the third quarter at Rs. 506.05, as against Rs. 411.66 a year earlier and Rs. 446.24 as at end of FY13. Earnings per share were Rs. 9.22 as at end 3Q and Rs, 34.91 as at end of first nine months.
RCH continues to enjoy an envious position of zero finance expenses both in the 3Q and first nine months, a feature that is quite common with the company given its reserves and cash. As at 31 December 2013, total equity amounted to Rs. 3.5 billion (inclusive of Rs. 1,96 billion in general reserves and Rs. 479 million in retained earnings), as against Rs.2.9 billion as at 31.12.2012 and Rs. 3.2 billion as at 31.3.2013.
Total assets were Rs. 3.6 billion, up from Rs. 2.9 billion as at 31.12.2012 whilst liabilities amounted to a mere Rs. 75 million as at 31 December 2013 up from Rs. 67 million a year earlier.
The Board of Directors of Renuka City Hotels PLC comprises Ravi Thambiayah (Chairman), F.H. Puvimanasinghe, N.A. Thambiayah, M.A. Jayawardena, S.R. Thambiayah, C.S. Wijeyeratne, A.L. Thambiayah, R.M.L. Tissanayaam and N.R. Thambiayah.
