 "PRS Oberoi, Executive Chairman, EIH Limited with Executive Vice Chairman S S Mukherji (L) during 66th AGM of the company in Kolkata")
Luxury hotel company EIH, which owns and operates Oberoi hotels, is missing the contribution of its iconic Delhi hotel.
The Oberoi Delhi was shut for a Rs 325 crore renovation from April 2016 and is scheduled to reopen in April 2018.
EIH’s net profit has shrunk from Rs 9.24 crore during the September quarter last year to Rs 3.79 crore in the same period this year.
EIH, the second biggest listed hotel company after Indian Hotels that operates the Taj brand, saw its net sales revenue declining close to 9% to Rs 272.56 crore in the three months ended September 30, 2016.
The 283-room hotel on Delhi's Dr Zakir Hussain Marg had contributed Rs 196 crore to EIH’s revenue in 2015-16. This was 11% of the consolidated revenue of the company.
However, EIH said it was seeing growth in other hotels. “If we remove the revenue of The Oberoi, New Delhi, there has been a growth of 11.5% in the top line during the second quarter of 2016-17. Robust growth in occupancy and average room rate at our other hotels has contributed to the increase in revenue,” the company said in response to queries.
The Oberoi, New Delhi, was a significant contributor to the profits of EIH, a company spokesperson said and added the hotel had added Rs 12 crore to the profit of the company in the September quarter last year.
“We are pleased that the strong performance by other hotels of the company and business units has offset more than half of the fall in profit resulting from the closure,” the company added. It said in a like-to-like comparison, the earnings before interest, tax depreciation and amortisation of the company in the September quarter had increased by 17.4%, year on year.
Founded in 1934, the Oberoi group operates 30 hotels under the Oberoi and Trident brands and has a presence in six countries. The group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters.
In 2010, Mukesh Ambani's Reliance Industrial Investments and Holdings became an investor in EIH and it currently holds a 18.54% stake with two board-level representatives, Nita Ambani and Manoj Modi. Ambani spent Rs 1,213 crore to acquire the stake between 2010 and 2012.
Tobacco-to-hotels major ITC, which has been buying EIH shares since 2000, has a 14.99 per cent stake in the company. The promoters of EIH, the Oberoi family, hold a 35.27% stake in the company.
