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Our Bureau

Mumbai, March 2 A subdued travel business and drop in revenues from financial services along with an increase in employee cost due to payment of severance packages, and adjustments on exceptional items led to an 81 per cent decline in Thomas Cook India’s net profit to Rs 4 crore on consolidated basis for its fourth quarter ended December 31, 2008 against Rs 21 crore last year.

The net sales of the company dropped to Rs 73 crore from Rs 75 crore last year.

While Thomas Cook earned revenue of Rs 66 crore (Rs 64 crore) from travel and related services, revenues from financial services stood at Rs 6 crore in the same period against Rs 9.8 crore last year.

The company’s employee cost increased to Rs 30.5 crore (Rs 26.6 crore) , as it paid severance packages to 175 retrenched staff on account of closing down of certain non-profit making offices and ongoing integration of its business after acquisition of LKP Forex and TCI.

Highlighting the environment under which the business functioned during the year, Mr Vinayak K. Purohit, Executive Director (Finance), said the inbound travel was severely hit with the recession in global economy and that the terror attacks of November 26 saw 30 per cent cancellations in bookings.

However, the company was able to maintain profitability by renegotiating contracts with hotels and its other partners. Going forward, the company is pinning its hopes on a strong dollar, which makes travelling to India cheaper, said Mr Purohit.

On the outbound, the impact was not much in fact Thomas Cook is seeing bookings ahead of that witnessed last year. Coupled with that it will continue to focus on travel within the domestic market, an initiative started last year.

The corporate travel on the other hand is severely under pressure, with business declining 30 to 40 per cent. However, “We feel it is a March 31 syndrome. Once the new financial year begins travel demand will pick up,” he said.

Thomas Cook maintained a positive outlook on its forex business and expects it to maintain last year’s growth of around 15 per cent.

The board has recommended dividend for the year ended December 31, 2008, in respect of equity shares at 37.5 per cent on each equity share of Re 1, at 0.001 per cent for Class ‘B’ and ‘C’ preference shares for January 1 to December 31, 2008.

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