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HomeNewsHotels and ResortsIHCL Q2 Revenue Jumps Vs Q1

IHCL Q2 Revenue Jumps Vs Q1

The Indian Hotels Company Limited (IHCL), South Asia’s largest hospitality company, reported its Consolidated and Standalone financials for the second quarter ending September 30th, 2020.

Revenues grew 78.7 per cent QoQ to Rs. 256.7 crore while it was down 74.5 per cent on YoY basis. Average occupancy levels of domestic business improved to 32.3 per cent vs 20.5 per cent in Q1 while ARR also improved by 12 per cent QoQ to Rs. 5424 for the quarter. Major pick-up being witnessed in leisure destinations. New business initiatives like launch of Qmin, staycations in Q1FY21 yielded additional revenue of Rs. 135 crores in H1FY21. Ginger hotels performance also improved significantly with occupancy reaching to 51 per cent in Sep-21 from average of 31 per cent in Q1.

The company continued with its cost optimization measures and reduced total operating expenditure by 51.9 per cent YoY to Rs. 407 crores. The company secured significant lease rental waivers that led to cost saving of Rs. 92 crores for the quarter. Overall, the company reduced fixed costs reduced by Rs. 134 crores, while variable expenses declined by Rs. 306 crore (in line with reduction in the revenues).

As a result, consolidated EBITDA loss narrowed down to Rs. 150.3 crore. On standalone basis, company reported EBITDA loss of Rs. 88 crores. While July-Aug month saw average EBITDA loss of Rs. 50.5 crore per month, September month notably registered positive standalone EBITDA of Rs. 13 crores with the improved hotel business

Consolidated net loss came in at Rs. 230 crores (vs net profit of Rs. 71.3 crore last year) after adjusting for exceptional gain of Rs. 20 crores (forex related). Fiscal incentives provided by US and UK government also helped to reduce the losses of international business

The company raised Rs. 750 crores of long term debt during H1FY21 to maintain the liquidity. The gross debt now stands at Rs. 3462 crores with net D/E ratio of 0.68x.

The group has signed seven hotels across brands across multiple locations and states in India. Also, in Q2 the chain relaunched the city’s iconic Machan at Taj Mahal, New Delhi and launched its 1st outpost at Taj West End, Bengaluru.

Commenting on the Q2 performance, Puneet Chhatwal, Managing Director and Chief Executive Officer, IHCL, said, “The pandemic is an unprecedented event that has impacted the economy significantly, especially the travel and tourism sector. Though a gradual recovery is visible, it will take time to reach pre-pandemic levels in this uncertain environment. At IHCL, all our efforts are focused in executing the R.E.S.E.T 2020 strategy committed to creating alternative revenue growth avenues, expanding its portfolio using an asset light framework, driving cost optimization and continuing to deliver value to all our stakeholders.”

The implementation of R.E.S.E.T 2020, a comprehensive five-point strategy, has provided a transformative framework to help the Company overcome COVID-19 related challenges, and has yielded positive results in the first half of FY 2020-21.

Giridhar Sanjeevi, Executive Vice President and Chief Financial Officer, IHCL, said, “IHCL has taken several measures to mitigate the financial impact on both profits and cash flow in recent months. With the ease of lockdown restrictions, we are seeing gradual signs of improvement in the second quarter; however full recovery will take some time.”

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