Asian Hotels and Properties PLC, owners of the Hotels Cinnamon Grand and Trans Asia and developers of prime property in Colombo, has boosted both revenue and attributable profit during the year ended March 31, 2008 despite the downturn in the hotel segment.

The company’s recently released annual report said that group turnover was up 34% to Rs.5.5 billion and the net profit after minority interest up 18% to Rs.847 million.

"This growth was primarily due to the contribution from the property sector, in particular, The Monarch, a project which is now in its completion phase," Mr. Susantha Ratnayake, Chairman of the company said.

"The property sector has contributed Rs.711 million being 84% of the profits of the group, whilst the hotels have contributed Rs.136 million being the balance 16%."

He said that the Cinnamon Grand, "having established itself firmly as the best city hotel in the country," had maintained leadership in all areas with an average occupancy of 63% throughout the year compared to the industry’s less than 54%.

Room revenue of Rs.4,604 per room had yielded Rs.838 million with the food and beverage division too doing nicely with a 30% market share in sales among the city hotels.

Ratnayake explained that "the impressive room night results" came from five major events during the year – the ICAAP Conference yielding revenue from 1,190 room nights, the Commonwealth Games Assembly from 1,188, cricket teams from 2,287 and the Borah and Iranian groups 1,636 and 673 room nights respectively.

Despite this, hotel profits were down to Rs.75.6 million during the year under review from the previous year’s Rs.116.4 million due to a Rs.66 million increase in the cost of finance.

Trans Asia too had done well with a 19% market share from the city hotel business gaining a percentage point from the previous year’s 18%. Room revenue here was up to Rs.1.2 billion from Rs.1 billion the previous year with rooms contributing 35% of the turnover and F&B 51%. Trans Asia had earned a net profit of Rs.143 million for the year, Ratnayake said.

He commended the minimum room rate policy for city hotels as "an excellent positive development which will safeguard the industry," saying that this policy is self-regulated and compliance to date has been excellent.

Their Monarch project on the Cinnamon Grand grounds is now nearing completion and completed residential units are being delivered to the owners, Ratnayake said. He expected title transfer to be completed as soon as the Condominium Plan along with the Condominium Declaration is registered with the Land Registry.

" Approximately 80% of the profits from this development have been recognized as at the end of this financial year, while the balance 202% will be recognized in our figures of 2008/09," he said.

Various security measures near the building site resulting in frequent road closures, restrictions on delivery of materials and regular security exercises had disrupted the construction work, he said.

Asian Hotels has also launched their second development project, The Emperor, a 35-storey luxury residential tower in December 2006 and construction is planned for completion ion 2010/11.

"It is noteworthy that 80% of the 164 residential units of The Emperor have been sold off plan. This is despite the volatile security conditions where investor sentiment is low," Ratnayake noted.

"The positive response by the market to The Emperor despite the depressed state of the industry is very encouraging and we are confident that the entire development would be sold out in the near future."

The year under review had seen the property development sector increasing revenue 82% to Rs.2.56 billion, a significant increase over the previous year’s revenue of Rs.1.41 billion. Profit after-tax was up 24% to Rs.711 million, he said.

He said that the company will continue to seek opportunities "in the external environment’’ with the primary focus for the next few years being the completion of The Emperor. "But we will also seek opportunities for expansion and growth."

Asian Hotels has a stated capital of Rs.3.35 billion, capital reserves of Rs.5.43 billion land revenue reserves of Rs.3.37 billion in its books. Interest bearing borrowings were running at Rs.1.1 billion.

The directors have recommended a final dividend of Rs.2 per share on top of an interim dividend of Re.1 per share paid on March 7 to give shareholders a return of Rs.3 per share for the year.

Net assets per share had grown to Rs.54.85 from Rs.42.73 and the company’s share traded at a high of Rs.47 and a low of Rs.36 against a trading range of Rs.58.25 to Rs.40.

John Keells Holdings with 83.8% is the dominant shareholder followed by Mercantile Investments Ltd. 1.68%, Dr. S. Yaddehige (1.58%) and Mr. R. Rajaratnam (1.09%).