Pegasus reports loss in Dec Q
PEGASUS Hotels of Jamaica incurred a $14.2 million loss in its December 2009 quarter but the company’s management chalked up the loss to non-cash expenses, stating that the operations actually made cash profit during the quarter under review.
The company, which runs a 300-room New Kingston hotel, saw its depreciation double for the review period having upgraded its rooms which resulted in the write down of aged assets.
“Our loss is really a book loss, our depreciation has doubled but we did generate a cash profit so for the quarter,” Eldon Bremner, general manager, told the Business Observer in an interview yesterday. “It is not a cash expense, when you add back that depreciation you actually get a cash profit.”
The hotel made $7.3 million net profit during the comparative period a year prior.
The depreciation helped push up administrative expenses 18.7 per cent to $58.8 million while other operating expenses declined some $2 million to $71.75 million year on year.
The hotel’s revenues dipped 9.5 per cent to $211.2 million for the December quarter from the comparative quarter the previous year.
Bremmer rubbished the argument that its New Kingston competitor, Spanish Court hotel had taken some of Pegasus’s market share.
“Spanish Court gets its marketshare from other hotels, not Pegasus,” he said.
Bremmer told the Business Observer that despite the decline in revenues that the hotel was doing “fairly well”.
Pegasus last year received a ten-year tax break with its upgrade of the premises. Part of the upgrade involved enlarging rooms via balcony removals in some rooms.
“We completed the upgrade and we have new rooms which are comparable to any international hotel,” stated Bremner who added that the hotel was not heavily discounting room rates. The hotel is currently being prepared for sale but Bremner told the Business Observer that there was no development at this time.
The hotel’s 300 rooms and suites comprises 52 Royal Junior Suites, 14 Royal one-bedroom Suites, three Royal Luxury Suites, 24 Deluxe Suites and 207 Deluxe Rooms. It has more than 1,300 square metres of meeting, banquet and exhibit space.
