Sri Lanka Keells Hotels losses mount, investments up

Aug 09, 2010 (LBO) – Losses at Sri Lanka’s John Keells Hotels rose in the June 2010 quarter from a year ago but it increased investments in new hotels and upgrading existing ones, a stock exchange filing said. The unit of the John Keells Holdings conglomerate said the net loss for the quarter widened 12 percent to 167 million rupees from a loss of 150 million the year before.

Sales fell five percent to 1.1 billion rupees over the period.

Revenue from John Keells Hotels’ Sri Lankan resorts increased while that from its Maldivian resorts fell but both sectors made losses.

However, the firm spent 585 million rupees on investments in hotels during the quarter, up from 32 million rupees the previous year, mainly in its properties in Sri Lanka.

Tourism in Sri Lanka is recovering after the 30-year ethnic war ended in May 2009 and tourist arrivals have increased sharply with most hotels expanding or refurbishing their properties.

The stock exchange filing said John Keells Hotels invested 2.8 million rupees in John Keells Hotels Mauritius.

The subsidiary is a shell company incorporated in Mauritius to make use of tax breaks and for overseas hotel investments.

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