Sri Lanka’s Galadari Hotel returns to losses

Nov 14, 2011 (LBO) – Galadari Hotels, a firm which owns and operates a five star hotel in Sri Lanka’s capital Colombo lost 45 million rupees in the September 2011 quarter, from a profit of 78 million a year earlier, interim accounts showed. The firm reported losses of 25 cents a share for the quarter. For the nine months to September the hotel reported losses of only 12 cents per share on total loss of 21.9 million rupees.

The loss came despite the hotel’s revenue rising 25 percent to 333 million rupees, amid a tourism boom.

But the firm has large foreign exchange loans. This quarter it reported a foreign exchange loss of 36 million rupees – a little lower than the net loss – as operating expenses and finance costs also increased.

In the last September quarter it posted proft with a forex gain of 78 million rupees.

The firm is planning a debt to equity swap. Galadari hotel was founded by the Dubai-based business group of the same name. A part of the stock was recently transferred to a Dubai government controlled investment fund.

A debt to equity swap is on the cards to strengthen its balance sheet.