Surabaya Hyatt Regency hotel suffering decline in profits

JAKARTA (JP): PT Bumi Modern, a company operating a five-star hotel in the East Java capital of Surabaya, recorded a decline in its after-tax profit to Rp 3.86 billion (US$1.77 million) last year from Rp 5 billion a year earlier, the company reports.

"The sharp decline was mainly caused by the expansion work of its Hyatt Regency hotel in Surabaya, which forced the hotel to operate half of its room capacity last year," the company's president, Sri Heodojo Sontokusumo, told reporters after an extraordinary meeting of its shareholders here on Monday.

The expansion, which cost the company around $96 million, was completed in December.

"With the expansion, the company has now a capacity of 500 rooms, 12 apartments, one six-story office building, a parking building with a capacity of 400 cars and an entertainment center," he said.

He added the expansion was financed by a syndication of foreign banks, including Bank of Tokyo Ltd., United Overseas Bank of Singapore, Malaysia's development and Commercial Bank Bhd. and Singapore-based ASEAN Finance Corporation Merchant Bank.

Sri said the company's before-tax profit also declined to Rp 12.15 billion last year from Rp 14.50 billion in 1992. "But our occupancy rate dropped only slightly to 63.3 percent from 68.7 percent previously," he added.

The company's earning per share also slumped to Rp 91 last year from Rp 143 in 1992.

"In spite of the decline in profits, we have agreed to pay a cash dividend of around Rp 50 per share," Sri said.

Bumi Modern is 58.17 percent owned by mutual insurance company AJB Bumiputera 1912, 8.89 percent by state-owned laborer insurance company PT Astek, 2.22 percent by PT Jan Darmadi Corporation, 10.67 percent by PT Puri Setiabudi Estate, 13.33 percent by PT Taspen and 6.72 percent by the investing public. (fhp)