Tangerine Beach back to profit as tourism prospects improve

Tangerine Beach Hotels Limited, a Mercantile Investment company, with a major interest in the adjoining Royal Palm Beach Hotels Limited, has returned to profitability in the year ended March 31, 2003 posting earnings of Rs. 7.3 million, up from a loss of Rs. 17.5 million a year earlier.

The company’s Chairman, Mr. George Ondaatjie, noted that after two decades of internal strife that adversely affected the tourism industry, "we see much better opportunities for the leisure sector if the current peace process is consolidated."

Ondaatjie reported that Tangerine had registered a turnover of Rs. 120.8 million for the year under review, up from Rs. 81.3 million a year earlier and the company had returned to profitability.

He said he was proud to mention that their associate, Royal Palms, is continuously outperforming the industry and that the company planned to shortly declare a 4% tax-free interim dividend for fiscal 2003/04 with the concurrence of the NDB which was a major preference shareholder.

"Major portion of the subsidiary’s dividend will accrue to Tangerine and it is important to re-declare same to our stakeholders at the earliest opportunity when liquidity permits without foregoing the tax-free status," he said.

He said that the momentum on the Colombo Stock Exchange was very promising and is expected to further enhance in the coming months strengthening the capital value of shareholders investments.

Several areas of the Tangerine Beach Hotel commissioned over 20 years ago are due for renovation and upgrading to compete with neighbouring hotels. The chairman said that there was a welcome improvement in tariffs enabling such investments.

The company paid an interim tax-free dividend of 5% in July last year and the directors have not recommended a final dividend.

The company had a Rs. 75 million issued capital, a revaluation reserve of Rs. 340.7 million, a share premium of Rs. 19.8 million and a revenue reserve of Rs. 144.8 million in its books as at March 31, 2003.

Nilaveli Beach Hotels Limited, also an Ondaatjie company, is the biggest shareholder of Tangerine with 21.2% followed by Mercantile Investments (21%) and Ondaatjie himself (9%).

Tangerine is a significant holder of Nuwara Eliya Hotels Company Limited in which it owns 100, 194 shares as well as a 27.5% shareholding of Royal Palm Beach Hotels described as a subsidiary in the Tangerine accounts.

The directors of the company are: Messrs. George Ondaatjie (Chairman/MD), Gerard Ondaatjie, V. Balasubramaniam, Herbert Cooray, J. P. Van Twest, Travice Ondaatjie, Hsantha Perera, Sumith Adhihetty, W. Edwin. de Silva (expired 01.05.2003 – alternate S. D. de Silva) and G. V. Divitotawela (expired 15.5.2003), Ms. Angeline Ondaatjie and Mrs. C. A. Ondaatjie.