Indian Hotels Company said that it had signed 24 hotels to its development pipeline, while cutting debt at the group as part of its strategy to sell non-core assets.
The comments came as the group reported third-party results with Ebitda up 32% to £50m.
Ebitda margins for the quarter were at 32.78%, the highest point in the last 10 years. The group said that it had opened nine hotels in nine months at the rate of one hotel a month. The company reached the 50th hotel under its Ginger brand in Surat, taking the total Ginger inventory to over 4,400 rooms across 35 locations.
Puneet Chhatwal, managing director & CEO, IHCL said: “In line with Aspiration 2022, the company reported seven consecutive quarters of consistent and sustained growth. The re-imagined brandscape enabled us to add a record 24 hotels to the development pipeline. IHCL kept its promise of opening one hotel a month. It began 2020 with the opening of another magnificent palace – Taj Fateh Prakash Palace in Udaipur.”
The company managed to reduce its debt levels further and reported a net debt to Ebitda, ratio of 1.76, down from 2.11.
Giridhar Sanjeevi, EVP & CFO, IHCL said: “This has been a good quarter on all parameters including debt reduction, asset management initiatives on sale of non-core assets, as well as higher cash flows.”
Last year IHCL agreed a $600m fund with GIC to invest in luxury, upper upscale and upscale hotels in India, acquiring fully operational hotels, including distressed or underperforming properties that can be turned around. The expansion will be in keeping with IHCL’s move to asset-light growth, with the equity contribution from IHCL at 30% and the balance 70% contributed by GIC. The hotels will be put under management contracts with IHCL.
Chhatwal said: “We are delighted to partner with GIC, one of the most reputable global investors. This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company. Through this platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning.”