Hospitality chain Lemon Tree's net profit fell 9.8 percent to Rs 43.79 crore crore year-on-year (YoY) in the December quarter of FY24 because of the increase in renovation expenses.
The renovation expense for the portfolio increased by Rs 5.5 crore Y-o-Y and Rs 4.8 crore quarter-on-quarter (Q-o-Q) which translated into a reduction in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin by 2 percentage points. The key portfolio EBITDA margin decreased by 9 percentage points Q-o-Q due to an increase in renovation expenses of Rs 1.8 crore over the previous quarter, the company said in its earnings presentation.
The company had reported a profit of Rs 48.59 crore during the same period a year ago. The hotel chain's profit rose 65.9 percent sequentially from Rs 26.38 crore in the September quarter.
The company reported total income of Rs 290.8 crore in Q3, up from Rs 230 crore in the quarter gone by. In Q3 FY23, the company had reported revenue of Rs 234 crore.
"Q3 FY24 has been the best ever Q3 performance in terms of gross ARR (average room rate), revenue and EBITDA. Q3 FY24 recorded a gross ARR of Rs 6,333 which increased by 10.4 percent Y-o-Y and increased by 20.2 percent Q-o-Q. Occupancy for the quarter decreased by 163 bps Y-o-Y and by 572 bps Q-o-Q. This translated into a RevPAR (revenue per available room) of Rs 4,176 which increased by 7.7 percent Y-o-Y and by 10.6 percent Q-o-Q," said Patanjali Keswani, Chairman & Managing Director, Lemon Tree Hotels.
During the quarter, the hotel chain signed nine new management and franchise contracts which added 621 new rooms to the pipeline and operationalized six hotels which added 967 rooms to the portfolio.
"Our operational inventory comprised 100 hotels with 9,687 rooms and our pipeline comprised 55 hotels with 3,746 rooms. As of now, we expect our operational inventory to be over 105 hotels with over 10,000 rooms by end of FY24. With no major capital expenditure plans in the near future, we will focus on strengthening our balance sheet and starting next year we will be reducing our debt which will peak by the end of FY24,” Keswani added.
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