InterContinental Dhaka incurs Tk181cr loss in FY21

InterContinental Dhaka, the country's first five-star hotel, incurred a loss of Tk181 crore in FY21, which was the biggest loss it suffered since its inception.

Bangladesh Services Limited, a government company listed in the capital market, owns the hotel operated by the InterContinental Hotels Group (Asia Pacific) Pte Ltd.

In its financial report, InterContinental Dhaka said it could not achieve its target revenue as the Covid-19 pandemic struck the hospitality industry and affected the hotel business severely.

The company's net asset value per share stood at Tk25.24 negative as its liabilities exceeded its total assets in the last fiscal year.

Nisar Ahmed, chief of accounts and finance at the Bangladesh Services, told The Business Standard, "The company's loss was higher due to the depreciation of its assets and interest on loans.  Moreover, we could not do the desired business due to the Covid-19."

"Our hotel had a lot of bookings for foreign guests on the occasion of the Mujib Year, but everything was cancelled because of Covid-19. Last year we did not even get any foreign guests. We received some local guests as we offered discounts on hotel services," he said.  

"At present, we are taking advantage of a deferral facility in repaying loan instalments, but at some point, we have to pay the instalments. So, we are in touch with the bank to extend the deferral facility until the business turns around," he added.

Bangladesh Services started its journey as Hotel InterContinental Dhaka back in the mid-sixties. Subsequently, the hotel operated as Dhaka Sheraton Hotel, and later as Hotel Ruposhi Bangla from 2011 to 2014 after the expiry of the contract with Starwood, the parent company of Sheraton.

In 2012, the company signed a 30-year agreement with the InterContinental Hotels Group (Asia Pacific) for management of the hotel with an option of renewing the agreement for two terms – five years each.

As per the agreement, the company renovated the hotel building. It took over a Tk1,000 crore loan to carry out the renovation work and started a new journey in 2018.

In FY20, InterContinental Dhaka emerged as a profitable company. Its earnings per share were Tk2.46 till March 2020, but after the Covid-19 started spreading, the company hit a snag.

At a meeting yesterday, the company decided not to recommend any dividend for its shareholders for FY21 due to the losses.

Besides, the company's shares have not been traded for a long time at the Dhaka Stock Exchange as the government owns 99.68% of its shares, while the general shareholders own 0.13%, and foreign investors hold the remaining shares.

At the end of Tuesday, its share price was Tk5.20 each at the premier bourse.