Peninsula Chittagong incurs losses after costs snowball

The recent depreciation of the domestic currency against the dollar pushed The Peninsula Chittagong Limited on the verse as the port city-based hotel incurred a massive loss in the first half of the current fiscal year.

The publicly traded company recorded a net loss of Tk 2.96 crore in the July-December period of the fiscal year 2022-23 against a profit of Tk 2.57 crore in the same period last fiscal.

Although the company incurred heavy losses in the first six months of the current fiscal year, its revenue went up by 30 per cent year-on-year meantime.

Mohammed Nurul Azim, company secretary of The Peninsula Chittagong Limited told The Business Post that they had to incur a loss mainly because of the unusual rise in dollar price against the taka.

“We have to import almost everything, including cheese and water because most of our boarders are foreigners. The exchange rate of the US dollar went up around 40 per cent since the start of the global economic volatility caused by the Russia-Ukraine war, raising our operating costs manifold,” he added.

“Besides, the principal chef of the hotel is a foreign national, while most of the food ingredients are import dependent.”

Peninsula Chittagong is also well-known for providing services for arranging business conferences and other corporate events.

“Although the December-January is a peak time for the tourism industry, we can lure a few tourists this time because tourists are mainly interested in traveling to Cox’s Bazar to have leisure time. So, we have fewer customers during this time,” Nurul Azim stated.

“After the Covid-19 pandemic, we did not hike the prices of food items, but the prices of food ingredients went up many times this time. Besides, the government recently hiked gas prices for industrial and commercial sectors. Now, we have no alternative but to raise the food prices to stay afloat” he continued.

The company logged revenues worth Tk 19.35 crore in the first six months of FY23, compared to Tk 14.88 crore in the same period last fiscal.

Of them, Tk 8.22 crore worth of revenue was generated from room rental which was Tk 6.26 crore in the same period last year.

The listed company earned revenue worth Tk 10.29 crore from the sales of food and beverages in the July-December period of the current fiscal year against Tk 8.47 crore in the corresponding period last fiscal.

The company’s loss per share stood at Tk 0.25 for H1 of the fiscal year 2022-23 against earnings per share of Tk 0.64 for the same period last fiscal.

According to Dhaka Stock Exchange (DSE) filing posted on Monday, its profit fell mainly due to a plunge in income and an increase in the cost of goods sales, administrative expenses, and increase in other costs.

The hotel company’s net cash flow per share stood at Tk 0.19 for the July-December period of 2022 against Tk 0.26 for the July-December period of 2021.

The company said its net cash flow per share fell significantly due to an increase in cash paid to suppliers in the first half of the current fiscal.

Its net asset value (NAV) per share stood at Tk 28.97 as on December 2022 which was Tk 29.47 as on June 2022.

The Peninsula Chittagong Limited is a company that offers a premier setting of conferences, meetings, and corporate events. It has a wide range of meeting rooms and venue options to choose from, according to the company website.

Incorporated in 2002, The Peninsula Chittagong Limited got listed on both stock exchanges in 2014.

Its shares traded at Tk 27.40 per share on the DSE trading floor on Monday.