# GALADARI HOTELS (LANKA) PLC Financial Summary

Canonical URL: https://pal.lk/updates/ghll-financial-summary
Symbol: GHLL.N0000
Company: GALADARI HOTELS (LANKA) PLC
Sector: Consumer Services
Published: 2026-08-15T19:24:28Z
Last updated: 2026-08-15T19:24:28Z

# GALADARI HOTELS (LANKA) PLC Financial Summary and Investment Analysis

## Executive Overview

GALADARI HOTELS (LANKA) PLC is a Colombo hotelier undergoing a major refurbishment and rebranding to **Radisson Blu Hotel Galadari Colombo**. The operating story has shifted from a profitable pre-renovation business to a construction-funded transition: room revenue fell to **zero in CY2025**, revenue collapsed, losses expanded, debt rose sharply and liquidity tightened. The strategic upside is a fully modernized 5-star property entering a strong tourism market; the principal investment question is whether post-reopening earnings can justify the enlarged capital base and debt burden.

**Periods covered:** quarterly Q3 2023–Q2 2026; audited annual context CY2021–CY2025. CY2025 is audited with an unmodified KPMG opinion; Q2 2026 figures are provisional/unaudited.

## Financial Performance

### Revenue and Profitability Trends

*LKR million; Q4 2025 is the standalone interim quarter.*

| Period  | Revenue | Gross Profit/(Loss) | Net Profit/(Loss) | GP Margin |  NP Margin |
| ------- | ------: | ------------------: | ----------------: | --------: | ---------: |
| Q3 2023 |   427.3 |               213.3 |              61.4 |     49.9% |      14.4% |
| Q4 2023 |   494.9 |               246.8 |              87.8 |     49.9% |      17.7% |
| Q1 2024 |   360.5 |               151.1 |            (13.5) |     41.9% |     (3.7%) |
| Q2 2024 |   266.8 |                96.1 |            (48.4) |     36.0% |    (18.1%) |
| Q3 2024 |   300.0 |               126.9 |            (46.0) |     42.3% |    (15.3%) |
| Q4 2024 |   133.4 |                21.5 |            (18.9) |     16.1% |    (14.2%) |
| Q1 2025 |   113.9 |                22.2 |            (84.7) |     19.5% |    (74.3%) |
| Q2 2025 |    76.7 |              (12.2) |           (129.8) |   (15.9%) |   (169.1%) |
| Q3 2025 |    92.5 |                 6.6 |           (104.2) |      7.2% |   (112.7%) |
| Q4 2025 |    65.5 |              (16.8) |           (292.7) |   (25.6%) |   (447.1%) |
| Q1 2026 |    72.0 |               (3.1) |           (348.1) |    (4.3%) |   (483.3%) |
| Q2 2026 |    42.7 |              (20.5) |           (468.6) |   (48.1%) | (1,098.3%) |

The deterioration aligns closely with the refurbishment that began in **2024-02** and progressively shut rooms. CY2025 revenue fell **67.1% YoY** to LKR 348.6m from LKR 1,060.7m; audited loss widened to **LKR 611.7m** from LKR 126.8m. CY2025 room revenue was nil; food and beverage generated LKR 280.6m, rental income LKR 31.7m and other hotel revenue LKR 36.3m.

H1 2026 revenue fell another **39.9% YoY** to LKR 114.7m and the loss widened **280.8%** to LKR 816.7m. Q2 2026 revenue was down **44.4% YoY and 40.8% QoQ**; the quarterly loss widened 34.6% QoQ. Finance performance is a major drag: CY2025 swung from LKR 239.2m finance income to **LKR 194.1m finance expense**, including a LKR 375.1m exchange loss. H1 2026 finance expense reached **LKR 368.4m**, while unrealised exchange loss in cash-flow adjustments was LKR 396.3m.

## Balance Sheet Analysis

*LKR billion.*

| Date       | Assets | Equity | Liabilities | Interest-Bearing Borrowings | Current Assets | Current Liabilities |
| ---------- | -----: | -----: | ----------: | --------------------------: | -------------: | ------------------: |
| 2024-12-31 |  14.40 |   7.25 |        7.14 |                        2.17 |           4.85 |                3.87 |
| 2025-12-31 |  16.11 |   6.20 |        9.91 |                        5.96 |           4.41 |                3.63 |
| 2026-06-30 |  18.82 |   5.39 |       13.43 |                        9.29 |           3.40 |                5.49 |

Asset growth is construction-led: PPE reached **LKR 14.14bn** by Q2 2026 versus LKR 8.23bn at 2024-12-31. Equity has moved the opposite way, falling to LKR 5.39bn as accumulated losses reached **LKR 11.05bn**. Working capital deteriorated from approximately **+LKR 0.77bn** at 2025-12-31 to **-LKR 2.08bn** at Q2 2026.

The latest simple current ratio is about **0.62x** and interest-bearing debt/equity about **172.5%**, versus the annual report's 95% debt/equity for CY2025. NAV/share fell from LKR 14.47 in 2024 to LKR 12.39 in 2025 and **LKR 10.76** by Q2 2026.

The hotel building incurred a **LKR 603.3m revaluation loss** in CY2025 because renovation involved demolition of existing areas; this reduced equity through OCI. KPMG identified building valuation as the key audit matter.

## Cash Flow Analysis

| Period  | Operating CF |      Capex | Investing CF | Financing CF | Approx. Free CF |
| ------- | -----------: | ---------: | -----------: | -----------: | --------------: |
| CY2025  |   (2,175.5m) | (2,956.2m) |   (2,162.4m) |     3,407.3m |      (5,131.7m) |
| H1 2026 |     (410.7m) | (3,452.4m) |   (2,791.8m) |     2,581.9m |      (3,863.0m) |

The refurbishment is therefore being funded predominantly by borrowings and existing liquidity rather than internally generated cash. At Q2 2026, balance-sheet cash was LKR 346.5m, but after a **LKR 320.4m bank overdraft**, cash-flow-statement net cash was only LKR 26.1m.

## Key Financial Ratios and Growth Indicators

| Indicator                                |                          Position |
| ---------------------------------------- | --------------------------------: |
| CY2025 ROE, derived using average equity |                            ~-9.1% |
| CY2025 ROA, derived using average assets |                            ~-4.0% |
| CY2025 approximate EBITDA margin         |                          ~-153.8% |
| CY2025 inventory turnover                |                             ~7.9x |
| CY2025 approximate receivable days       |                         ~146 days |
| Revenue CAGR, CY2023–CY2025              |                      ~-53.4% p.a. |
| Q2 2026 EPS / H1 EPS                     |                   (0.94) / (1.63) |
| 2026-08-14 price / Q2 2026 NAV           | LKR 15.90 / LKR 10.76; P/B ~1.48x |
| P/E                                      |         Not meaningful due losses |

Efficiency ratios are heavily distorted by the shutdown and abnormal revenue base. Profit CAGR is not meaningful because the company moved from profit in CY2023 to losses thereafter.

## Economic and Market Context

The reports describe a strong tourism backdrop: Sri Lanka recorded **2,362,521 arrivals in 2025, +15.1% YoY**, exceeding the 2018 record. India represented 22.5% of arrivals, followed by the UK, Russia, Germany and China. However, tourism revenue missed the USD5bn target because daily spending was lower than expected.

The 2026 target is 3m arrivals and USD4bn revenue, while the report also flags an 18.1% March 2026 arrivals decline linked to Middle East geopolitical escalation. This creates a favorable long-term demand backdrop but meaningful near-term travel sensitivity.

## Future Potential and Outlook

The Radisson Hotel Group partnership is intended to improve 5-star positioning, operating standards and guest experience. The biggest upside is straightforward: **reintroduction of room revenue**, which was nil in CY2025.

Project scale has expanded materially. Early 2024 disclosures referred to a **USD20m Mashreq Bank loan**; the CY2025 notes described an initial refurbishment investment of **USD33.5m** and the need for additional funding, while management discussion referred to an ongoing **USD48m** refurbishment.

The disclosed Mashreq facility is 84 months, priced at **3-month EIBOR +2.25%**, secured over the hotel leasehold, with repayment following the moratorium/Phase 1 trigger.

The latest Q2 2026 interim says reopening is expected in the **early part of Q4 2026**, while the annual management discussion says refurbishment extends through **2026-11**. The reports do not reconcile these dates, so phased reopening or timetable slippage remains a key item to monitor.

## Risks and Challenges

* **Leverage/liquidity:** borrowings rose to LKR 9.29bn and working capital turned deeply negative.
* **FX and interest-rate exposure:** USD-linked debt and EIBOR pricing have already produced large exchange/finance losses.
* **Execution risk:** higher project scale, large capex and remaining funding needs create cost-overrun and delay risk.
* **Operating ramp-up:** post-reopening revenue and margins must recover rapidly to cover a much larger financing burden.
* **Legal/provision risk:** CY2025 provisions totaled LKR 309.0m, including LKR 268.5m related to the Phil East Asia arbitration and LKR 40.5m for the unresolved CMC licence matter.
* **Equity erosion:** losses and revaluation reductions have materially lowered NAV.
* **Tourism sensitivity:** geopolitical shocks and visitor-spending weakness can affect the recovery.

## Shareholder and Corporate Information

Galadari Brothers Co. (LLC) remains dominant at **63.57%**; Iceberg 2 Limited holds 5.89%, Abdul Latif Galadari Holding Limited 5.31% and Calgary Holdings S.A. 3.62%. Public holding remains **12.57%**. M. A. I. Galadari and I. A. I. Galadari each hold 9,810,017 shares and Suhail A. I. H. Galadari holds 9,810,016 shares.

The Employees Provident Fund fell from **23.71m shares/4.73% in Q3 2025 to 1.22m/0.24% at 2025-12-31**, a notable ownership reduction.

CY2025's reported share-price high/low were **LKR 21.70/LKR 16.50**, with a 2025-12-31 price of LKR 18.50. The 2026-08-14 Pal snapshot shows LKR 15.90, a 90-session range of LKR 14.90–17.80, average daily turnover of LKR 1.32m and foreign holding declining from 86.48% to 85.93% between 2026-04-02 and 2026-08-14. No dividend declaration is disclosed in the supplied reports.

## Investment Decision Indicators

**Strengths:** valuable Colombo location; strong controlling shareholder; Radisson Blu repositioning; record national tourism arrivals; substantial physical-asset investment; core room-revenue recovery remains ahead rather than already reflected in current earnings.

**Weaknesses:** revenue and margins have collapsed during renovation; H1 2026 losses accelerated; liquidity is tight; leverage and FX exposure are high; equity/NAV continue to erode.

**Opportunities:** successful reopening with restored room inventory, stronger international branding and higher-yield tourism could produce a sharp operating recovery from an unusually depressed base.

**Threats:** delayed reopening, further project-cost escalation, additional debt, EIBOR/FX pressure, weak ramp-up occupancy/room rates, or tourism shocks could leave the enlarged asset base unable to generate adequate returns.

**Overall assessment:** the company is currently a **high-execution-risk turnaround/redevelopment case rather than an earnings-supported hotel investment**. The most decision-critical evidence after Q4 2026 will be reopening completion, room revenue, occupancy/ADR recovery, gross-margin normalization, operating cash flow, final project cost and whether debt begins to stabilize or decline. Until those metrics emerge, the reports show substantial strategic upside but equally substantial balance-sheet and funding risk.