Hyderabad, April 30 (IANS) TAJGVK Hotels & Resorts Limited's profit declined 68 percent during fiscal 2012-13 and the same came down 88 percent during the fourth quarter ended March 31.
The company, which Tuesday announced its results for Q4 and the year, attributed the decline to slowdown in the economy, increased competition in all geographies and the higher interest and depreciation for its new property.
TAJGVK, a strategic alliance between the Hyderabad-based GVK Group and Indian Hotels Company Limited (IHCL), said its profit before tax was at Rs.13.60 crore for year ended Mar 2013, compared to Rs.42.78 crore in the previous year.
During 2012-13, the company's total income has de-grown by one percent to Rs.254.23 crore from Rs.255.93 crore in the previous year.
During the fourth quarter, the income was lower at Rs.64.26 crore as compared to Rs.71.49 crore in the corresponding period last year. Profit before tax was at Rs. 1.11 crore in Q4 as compared to Rs.9.56 crore in the corresponding period last year, thus registering a decline of 88 percent.
"Slowdown in Indian economy along with increase in competition in all geographies have negatively impacted operations of the company in the 4th quarter of the year. Further, an additional hit of Rs.1.69 crore arose in the quarter on account of the Fuel Surcharge Adjustment demand by the Central Power Distribution Company Ltd of Andhra Pradesh," said the company.
"Vivanta By Taj - Begumpet which opened last year has been well received in the city and is in the process of scaling up its operations. Though the higher interest and depreciation for the new property have impacted the financials of the company in the quarter, the investment will bear fruit once the operations stabilize," it said.
The company has started expansion of Taj Krishna with 20,000 square feet closed banqueting facility. With the synergy already available between Taj Krishna and Taj Deccan with the interconnecting bridge, the additional facility will bring in more room and F&B business to both properties, it said.
TAJGVK also announced that it would invest Rs.110.25 crore in 275-room five-star Taj Hotel it is building near Mumbai international airport, jointly with Greenridge Hotels & Resorts Private Limited, a GVK company.
TAJGVK has been allotted around six acres of land at Yelahanka near Bangalore for hotel projects. It is also planning to enter the value for money segment through the 'Ginger' brand in Andhra Pradesh. The excavation works on the first Ginger hotel near Hyderabad International Airport have been completed and civil work is expected to commence shortly.
The company said with the continuing recovery in the global and Indian economy, the hotel industry is expected to perform better. With its prime properties in key metros, the company is well positioned to benefit from the growing demand and restricted supply going forward, it added.