A MASSIVE haemorrhage has erupted from Sans Souci Resort and Spa, following the Carreras Group's decision to assume direct management control of its hotel property.
Carreras showed a $223 million loss on its hospitality operations, according to its financial report for the nine months ended December 31, 2003. Carreras ejected the former managers, VRL Services Limited, and assumed control on May 1 last year.
Carreras had reported a $31 million loss for the nine months ended December 31, 2002, under the VRL management.
Formerly a widely diversified entity, Carreras has been divesting non-core activities to focus on its tobacco-related operations. Its hospitality division, encompassing Sans Souci, is its only other non-core operation, and the Group took over the management last year, it said, to divest the property.
Net stockholders' profit at Carreras Group for the nine months ended December 31, was $2.3 billion. All the operating profit came from the tobacco division.
The major problem in the hospitality division appears to have been a plunge in revenues. For the nine-month accounting period last year, the hospitality division earned $212 million in revenues, down $121 million from the previous nine-month period in 2002. Sans Souci had been heavily discounting its room rates to attract business.
Carreras started managing the property in May and has been seeking a buyer willing to match its price, it stated.
Chairman, George Ashenheim, said in October that a deal with a new hotel management company should have emerged by the end of 2003, but none has been announced so far.
