GHG reports BD16.133m Net Profit

Manama : Gulf Hotels Group (GHG) announced it has achieved a consolidated net profit of BD16.133 million for the year. 

The group has managed to achieve Gross Operating Revenue of BD36.377m and a Net Profit of BD16.133m after consolidating the results of BTC with GHG, including one time provisional bargain profit of BD6.126m.

Besides, shareholders approved a cash dividend of 25pc or 25 fils per share on the paid up capital and 10pc bonus shares (one for every 10 shares), Director’s fees of BD267,000, Charity Reserve Expense of BD224,200 and BD10,000 towards National Promotional activities.

This was announced during the group’s forty seventh Annual General Meeting held yesterday in Awal Ballroom 3 at The Gulf Hotel. The meeting was presided over by group’s Chairman, Farouk Yousuf Almoayyed.

For the year ended 31st December 2016, GHG achieved a total Gross Operating Revenue of BD36.377m compared to BD32.370m in same period 2015, an increase of BD4.007m or 12.38 per cent. The group generated a Net Profit of BD16.133m in comparison with BD9.197m achieved in the same period 2015, an increase of BD6.936m or 75.41pc on 2015 mainly influenced by one time provisional bargain profit.

Commenting on the results, Almoayyed said the hospitality industry has been negatively impacted by a number of factors including the government’s decision to cap service charge to 10pc and increase of Government levy by 5pc, cuts in subsidies including meat products, fuel and utilities and the almost doubling of import duties on certain beverages. These factors, along with increased competition from a number of new hotel openings in 2016, have negatively impacted the income of the Gulf Hotel.

The austerity drive, which will continue with new measures in 2017, 2018 and 2019, will have further impact on the industry as the spending capability of people declines. Reduced economic growth will impact on the hospitality sector as will the introduction of VAT from 2018 onwards, he said in a statement. 

Looking ahead, Almoayyed confirmed that the company has commenced the development of the 230 rooms, five star Gulf Hotel Business Bay in Dubai, a waterfront property located 1.5km from Burj Khalifa and Dubai Mall, and expected to be completed end 2019. 

Chief Executive Officer Garfield Jones said the Group plans to enter into the stand-alone restaurant market in both Bahrain and KSA, having already acquired Block 338 in Adliya Tourism Zone for developing it into a multi-unit restaurant and leisure facility, and pursuing Joint Venture proposals for opportunities in Saudi Arabia.

He also said that the construction of 109 unit Gulf Executive Residence Juffair, which is well underway and expected to be completed by Q1 2018.