Gulf Hotels Group (BHOTEL) yesterday recorded a third quarter net profit of BD1.117 Million compared to BD2.809m during the prior year quarter, which is a decrease of 60.23 per cent. Earnings per shares were 5 fils compared to 12 fils in the third quarter of last year. The decrease in the net profit was attributed mainly to preopening expenses, interest costs and depreciation for the new Gulf Court Hotel Business Bay in Dubai, which opened from the 1st August.
The group also said that hotel operations in Bahrain continue to be affected by a decrease in Room’s revenue, which is driven by lower room rates and lower occupancies. Food & Beverage income was also affected by lower occupancy levels but were also impacted by the closure of the Gulf Convention Centre and a number of outlets, which were under renovation in Q3. In addition, reduced profit of BD299k were recorded from associates and share investments.
Commenting on the results, Chairman, Farouk Almoayyed said that he was delighted that the Group’s new hotel had opened in Dubai but that this had an impact on the quarterly financial performance. He, however, said that Bahrain continues to face declining occupancies and room rates and “believes that the industry is now in a very critical situation, having seen year on year decline for the past 5 years.”
He added: “Significant increases in operating costs have also eroded the bottom line and the pending introduction of VAT is further likely to add to the difficulties faced by the industry.” Net comprehensive income was BD 1.201m for the quarter, compared to BD2.367m a year ago, with a decrease of 49.26pc. Operating profit was BD2.922m, compared to BD3.102m in the third quarter of last year, with a decrease of 5.78pc.
With regards to revenue/ sales, the company achieved BD8.225m during the third quarter, compared to BD9.160m in the same quarter of last year, with a decrease of 10.21pc. With regards to the YTD financial results, the company achieved a net profit of BD5.740m compared to BD8.679m in previous year, with a decrease of 33.86pc. With regards to revenue/ sales, the company achieved BD24.825m, compared to BD27.546m in last year, with a decrease of 9.87pc. Earnings per shares were 25 fils compared to 38 fils in last year.