Five out of six companies listed on the Nepal Stock Exchange under the hotel and tourism sector have reported profits in the second quarter of the current fiscal year.
According to unaudited financial statements, City Hotel is the only company in this sector to report a loss. Meanwhile, Soaltee Hotel, Taragaun Regency Hotel, Chandragiri Hills, Oriental Hotels, and Kalinchok Darshan Limited have all posted profits.
City Hotel reported a net loss of over Rs 104.9 million for the second quarter, an improvement from last year’s net loss of Rs 117.9 million, reflecting an 11% reduction. Despite a decline in total revenue, the company managed to cut its losses. In the first six months of the last fiscal year (2023/24), City Hotel had generated revenue of over Rs 278.5 million, which has now dropped to Rs 257.1 million.
According to Tilak Koirala, a manager at City Hotel, the company is burdened with debt and is preparing for an 80% rights shares issue to address it. Since only ordinary shareholders who have held shares for two years can subscribe to the rights shares, the company is making necessary preparations.
City Hotel, which has been operating under the Hyatt Place brand since January 17, 2024, has recently rebranded to Hyatt Centric. Koirala expressed optimism that upgrading service standards would help the company transition from losses to profitability. He also noted that the company has been regularly paying loan installments and securing short-term interest-free loans from management decisions to meet operational expenses.
Except for City Hotel, all other companies in this sector have reported profits this year. However, only three of them have recorded profit growth compared to last year.
Soaltee Hotel reported a net profit of over Rs 317 million, marking a nearly 15% increase from last year’s Rs 263 million. Chandragiri Hills' net profit grew by 5.78%, rising to over Rs 66.4 million from Rs 62.8 million last year. Taragaun Regency Hotel posted an increase of 2.84%, with its net profit reaching over Rs 187 million, up from Rs 161.6 million last year.
In contrast, Oriental Hotels experienced a 46% decline in net profit, which fell to over Rs 28.8 million from Rs 53.4 million in the previous six months. The drop in operational revenue contributed to this decline, as the company’s revenue decreased from over Rs 561 million last year to Rs 491.7 million this year.
Meanwhile, Kalinchok Darshan Limited successfully turned its losses into profits. The company, which had reported a net loss of over Rs 8.57 million last year, posted a net profit of over Rs 4.74 million this year.
Three out of six companies in the sector have distributed dividends to shareholders. Soaltee Hotel, Taragaun Regency Hotel, and Oriental Hotels continued their dividend distributions this year, while other companies left shareholders empty-handed.
Soaltee Hotel declared a 5% bonus share and a 26.57% cash dividend, totaling 31.58%. Oriental Hotels, which had not distributed dividends since the fiscal year 2018/19, offered a 5.26% cash dividend this year. Taragaun Regency Hotel announced a 5% bonus share and an 11% cash dividend, amounting to a total of 15%. Meanwhile, Chandragiri Hills, Kalinchok Darshan, and City Hotel are still striving to become financially stable enough to distribute dividends in the future.
