GHG reports BD 6.922 million net profit for 2018

March 12, 2019

Gulf Hotels Group (GHG) generated a net profit of BD6.922 million for the year ended 31 December 2018 in comparison with BD11.036m achieved a year ago, a decrease of BD4.114m or 37.28%, as per the group statement.

The decrease was attributed to the pre-opening expenses of the new Gulf Court Hotel Business Bay Dubai which opened in August 2018, interest costs pertaining to the Hotel’s purchase and additional depreciation for the same, together with the new beverage operation in Sri Lanka. Net profit was also impacted by the closure of the Gulf Convention Centre and a number of outlets, which were under renovation till Q3. The development cost of the land in Dubai was also written down this year. In addition, reduced profit from associates and share investments.

GHG achieved a total Gross Operating Revenue of BD35.111m compared to BD37.261m in the same period 2017, a decrease of BD2.15m or 5.77%.

Farouk Almoayyed, Chairman GHG commenting on the results said, “Given the expansion of hotel operations into Dubai, expansion of beverage operations into Sri Lanka and the significant upgrade to the Gulf Hotel’s Convention Centre and outlets, we always knew that this would have an impact on the 2018 profitability, but the year has seen a major step in our expansion strategy and will yield positive results in years to come.

“The Group has already purchased a piece of land in Block 338 in Adliya Tourism Zone to develop a multi-unit restaurant complex. The second phase of the renovation of the Group’s Crowne Plaza Hotel will commence during 2019. Also, the Group won a tender with the Tourism Department to operate F&B operations and chalets in Bahrain Bay.

“Whilst the hospitality industry in Bahrain continues to face challenges due to declining occupancies and room rates, the government had started to take positive steps to bolster tourism and has recently reduced Government Levy to 5% to compensate for the introduction of VAT,” Almoayyed added.

Garfield Jones, CEO GHG stated that, “The Group also completed the construction of the Gulf Executive Residence in Juffair in December 2018, which will also make a positive contribution to Group incomes during 2019.

“Works are underway to further expand operations in Saudi Arabia during 2019 as the Group has signed an MOU with Redha Group in Saudi Arabia to explore operations of Hotels, Apartments, Restaurant and Laundry business. The upcoming year also represents the 50th anniversary of the Gulf Hotel which will enjoy a year full of celebratory events,” he added.