Kandy Hotels in JV to build 100 room new hotel for Rs. 1.2 b

Kandy Hotels Corporation (KHC), which comes under the Galle Face Hotel Group, has announced a joint venture with Sino Lanka Hotels Holding (Pvt) Ltd. to construct a 100 room hotel, on the land adjacent to the Suisse Hotel Kandy.

The total cost of the project is estimated at Rs. 1.2 billion.        

The two companies will be equally contributing to the equity of the joint venture and the agreement will be limited to the construction and operation of the hotel.
News on the new development was cheered by investors as the share price of Kandy Hotels rose by Rs. 29.10 to Rs. 240.50 at close on thin volume of 700 shares whilst it hit an intra-day high of Rs. 250. Last week Kandy Hotels’ share price rose by Rs. 8.90 to close at Rs. 211.40 with a volume of 2,600 shares. Its 52-week highest is Rs. 290.
Ceylon Hotels Corporation, control of which is held by Galle Face Hotels Group, holds a 76.5% stake in Kandy Hotels, whilst Curlew Ltd., a related party to Galle Face Hotel, owns a 10% stake.
In the six months ended on 30 September 2010, Kandy Hotels reported a net profit of Rs. 27.5 million, up by 24% over the corresponding period of last financial year. Of that figure, Rs. 25 million profit had come in the second quarter, up from Rs. 20 million a year earlier. Turnover in the first half was Rs. 158 million, up by 37%, whilst in the second quarter share was Rs. 89 million.