Hotel Intercontinental Earns Operating Profit

Press, Volume CX, Issue 32306, 26 May 1970, Page 18

Hotel Intercontinental Earns Operating Profit

(New Zealand Press Association) AUCKLAND, May 25. Although Auckland Intercontinental Properties, Ltd, the proprietor of the Hotel Intercontinental, Auckland, managed to earn an operating profit in the year to October 31 last, the accounts released today show a further net loss after interest charges and depreciation are allowed for.

The latest net loss is $663,796 which together with the $1,015,855 lost by the hotel in its first 71 months of business brings total losses in the* 1| months period to $1,679,651.

This figure is after aggregate depreciation of $862,352 some $352,084 of which applies to the latest year, and interest charges of $585,771 of which $365,340 is for the latest year. Commenting on the result the directors of the companysay the loss is largely because of the heavy depreciation charges against buildings, hotel equipment and plant and interest on unsecured loan stock. “While it has been board i policy to take maximum de-! preciation and fixed assets, have been written down accordingly, it should be notedthat building costs have continued to rise by 3| to 4 per cent,” they say. “It is probable that the cost of the hotel today would ! be $1 million higher than it J was when the contract was let 4i years ago.”

The directors also say that with improved trading results achieved in each corresponding month of the current term —a trend which is expected to continue throughout the current year—plus a further reduction in depreciation they feel a continued recovery can be confidently anticipated. The profit and loss shows that the operating profit for the year was $131,570 which compared with an operating

loss of $254,393 in the previous 7} months. From this latest profit is deducted depreciation charges of $352,340 and interest charges of $365,340. This interest is payable on the loan funds of $5.8 million which have been advanced to the company by the Government. The latest result has increased the deficiency in shareholder funds from $175,855 to $839,651. Off List Shares of Amit Subdivisions, Ltd, have been removed from the official list of the Stock Exchange, as a consequence of the successful take-over by Broadlands Dominion Group, Ltd.