By James A. Loyola
Roxaco-Asia Hospitality Corporation (RAHC), the hotel business unit of Roxas and Company, Inc. (RCI) , has raised ₱411 million from the sale of its budget hotel site in Cubao, Quezon City.
In a disclosure to the Philippine Stock Exchange, RCI said RAHC decided to sell and relocate the Cubao site of its Go-Hotel franchise, to a more strategic location.
RCI said the property sales is part of its “continuing objective of improving net income and reducing the group’s overall debt.”
“Proceeds from the sale of Cubao site of about ₱411 million will be used to improve existing sites and lower the subsidiary’s outstanding debt until a new site has been identified,” RCI added.
RAHC operates five budget hotels under the Go-Hotel franchise. These are located in key areas in Metro Manila including Parañaque, near the three international airport terminals, North EDSA, Timog Circle, Cubao, and Malate.
RCI reported a consolidated net loss for the first nine months of 2019 of ₱384.69 million, higher than last year’s loss of ₱316.59 million despite higher gross profit and lower operating expenses.
The firm said the loss expanded due mainly to higher interest expenses and the equity in net loss from Roxas Holdings, Inc.
Consolidated revenues as of the third quarter amounted to ₱624.42 million, an increase of 61 percent against last year’s ₱387.47 million.
Revenues were higher across all business units which include real estate sales, coconut exports and both its Go Hotels and Anya Hotel.
Gross profit as of the third quarter of ₱239.24 million was 55 percent higher than last year’s ₱154.29 million because of higher revenues on hotel operations and on the gain on sale of idle lands sold.
Operating expenses decreased by 33 percent to ₱272.55 million from last year’s ₱409.63 million despite the significant increase in revenues due to the Group’s ongoing cost reduction resulting to lower utilities and repairs.
Equity in net loss from the group’s 23 percent investment in RHI increased to ₱140.93 million, a reversal from last year’s equity in net income of ₱28.24 million.
Net interest cost of ₱217.93 million was 55 percent higher than last year’s ₱140.66 million because of higher market interest rates.