Financial Times

Galadari reduces losses on tourism boom
The Galadari Hotel has managed to reduce its losses last year because of higher turnover on the back of tourist revivals and lower foreign exchange losses.

The company has also revealed plans to change its capital structure and reschedule its loans, prompting auditors Ernst and Young not to qualify the accounts this time and rely on the word of the directors.

Galadari Hotel has reported a loss of about Rs 201 million for the year ended December 31, 2003, a significant decline of 47 percent compared to that of the previous year's loss of Rs. 374 million.

This significant decline is due to the 17 percent growth in turnover of the hotel and a significant improvement in the foreign exchange losses. The hotel made a foreign exchange gain of Rs 2 million compared to the huge Rs 128 million exchange loss incurred in the previous year.

This performance brought a significant decline in loss per share to Rs. 1.10 from Rs. 2.05. This 46 percent decline in the loss per share gives some hope for the continuously loss-burdened shareholders of the hotel in the years ahead.

Mohamed Abdul Rahim Galadari, the chairman of the hotel, in his statement to shareholders issued along with the annual report of the company for the year 2003, attributed this performance to the continued peace process in 2003 with no major incidents reported in the island resulting in an upsurge in tourist arrivals.

This resulted in a 20 percent increase in the room occupancy compared to that of the previous year. Auditors Ernst and Young, who continuously qualified the hotel's audit report for the last several years, this time relied on the word of the directors to do away with the qualification.

The directors of the company stated that they are in the process of restructuring the capital structure of the hotel and favourably looking forward to renegotiating the repayment of the loans to the Galadari brothers and the government of Sri Lanka.

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