An official source at Misr Hotels (MHOT) said that Safir Dahab resort is expected to begin operation in January 2020, after finishing its development, with occupancy rate predicted to reach 33% in the second half (2H) of the fiscal year (FY) 2019/20. The company’s other hotel, Nile Ritz-Carlton, is expected to achieve occupancy of 79% during this fiscal year.
The source added that the company allocates EGP 140m for the development of Safir Dahab hotel, in addition to the expansions for NOX restaurant at the Nile Ritz-Carlton.
MHOT management also decided to take arbitration proceedings against Genting Casinos, which leased the games casino at the Nile Ritz Carlton. The company will resort to the Cairo Regional Center for International Commercial Arbitration to request the resolution of the dispute with Genting Casinos regarding the payment of a value-added tax (VAT).
In August, the board of directors of MHOT agreed to pay EGP 10m of VAT for the Nile Casino at the Ritz Carlton.
The company demanded Getting Casinos to pay $250,000 as a guarantee for its commitment to MHOT.
According to the statement, the company will be required to pay the tax due for the period following the tax evasion of about EGP 21.5m between 1 September 2018 until now.
MHOT has realised net profits of EGP 61.6m in the first quarter (1Q) of FY 2019/20 (July through September), up from EGP 54.9m in the same period last year.
The company’s revenues declined during the period to EGP 109.3m against revenues of EGP 119m in the 1Q 2019/20.
The company attributed the profit growth to the decrease in financing expenses by EGP 7.02m, compared to the same period last year, as interest rate at the Central Bank of Egypt (CBE) was cut several times in 2019, and the company has paid the quarterly instalments regularly.
The CBE cut interest rates three times this year in February, August, and October, bringing the rate of deposit and lending and its main operations to 13.25%, 14.25%, and 13.75%, respectively.
MHOT noted that the quarterly profits were also due to an increase in interest payable by EGP 2.43m.