India's Mahindra Holidays posts 99% slump in Q1 profit as Europe losses weigh

BENGALURU, July 25 (Reuters) - Mahindra Holidays and Resorts India (MAHH.NS) reported a 99% slump in first-quarter profit on Tuesday, hit by higher expenses and widening losses in Europe.

Consolidated net profit for the company, known for its flagship resorts brand \“Club Mahindra,\” was 1.8 million rupees ($21,992.90) for the quarter through June 30, compared with 297.3 million rupees a year earlier.

Revenue from operations rose 1.6% to 6.14 billion rupees.

Profitability was hit by the low demand in Finland and Sweden, the company said in a statement.

Resort occupancies barely grew one percentage point from a year ago to 90%. Total expenses rose 7.7%, led by higher rent, finance and depreciation costs due to room inventory addition.

Revenue from the Europe, where brands such as Holiday Club Resorts OY or HCRO operate, declined nearly 10%. The segments loss before tax nearly tripled to 365.2 million rupees.

In India, the profit grew 7.3%, while revenue rose nearly 17%.

The Mahindra Group company, however, was optimistic about this quarter, citing the summer holiday season and a pick up in domestic travel from the last week of June. It also expects demand to continue rising until mid-August.

Shares of the company settled 3.1% lower after falling as much as 5% soon after the earnings announcement.

($1 = 81.8446 Indian rupees)