The Kingsbury returns to profit but says economic crisis took toll since March

The Kingsbury PLC recorded a recovery from the pandemic-induced slump in the quarter ended on March 31, 2022, though its business was hit by the economic crisis in the final month of the quarter.

The city hotel reported earnings of Rs.100.3 million or 21 cents a share for the Januarymarch quarter, compared to a loss of Rs.116.7 million reported in the year earlier period.

The revenues also rose to Rs.821.5 million, from Rs.273.5 million in the same period a year ago.

The Kingsbury’s performance is likely to give a hint about the performance of the rest of the city hotels, which will report their financial results in the coming weeks, as the March quarter earnings season is just getting underway after some delay. The hospitality sector suffered for three consecutive years thus far, first by the Easter Sunday attacks in April 2019 and then by the two years of pandemic-induced lockdowns and related travel restrictions, causing massive losses. The sector is still under support from loan moratoria, which would expire in June, this year. However, it is uncertain whether the sector could survive without further support from the government, as the tourist arrivals, which saw some resurgence in the first three months, fell by a half in April, due to the economic crisis that has spiralled out of control, causing a massive scale political and social crisis.

“During the months of January and February, the business gradually started improving with increased footfall. However, by March, the economic crisis impact of the above is reflected in the financial statements,” The Kingsbury said.

“The management continuously evaluates the situation and is currently practicing several cost management measures to benefit the cash flows,” the company added.

Despite the quarter returning to black, the annual results were still in red, although the company managed to narrow its losses to Rs.426.8 million, from Rs.758.2 million in the previous financial year. The revenues however recovered substantially to Rs.2.02 billion for the full year ended on March 31, 2022, from Rs.777.9 million.

Billionaire Dhammika Perera-controlled Hayleys PLC, in concert with its group company Carbotels (Pvt) Limited, has a 59.48 percent stake in The Kingsbury while Perera separately holds a 1.33 percent stake, besides his other related parties.

The Employees’ Provident Fund has a 10.56 percent stake of the firm being the second largest outside shareholder after the Hayleys group.