Colombo, 01 September 2026 – Hikkaduwa Beach Resort PLC (HBRP), the owning and operating company of the popular beachfront hotel Citrus Hikkaduwa, has announced a notable improvement in its financial performance, reporting a significant reduction in its loss after tax for the financial year ended 31 March 2026. The company’s Annual Report for FY2025/26, released on August 31, 2026, highlights strategic responses to a challenging operating environment and outlines future plans for property enhancements and market diversification.
Resilience in Financial Performance
Despite persistent global geopolitical tensions, rising operational costs, and increasingly value-conscious travellers, Hikkaduwa Beach Resort PLC demonstrated resilience. The Group reported a revenue growth of 3% to Rs. 1.88 billion (from Rs. 1.82 billion in the previous year). Crucially, the loss after tax narrowed significantly by 32% to Rs. 97.41 million, a substantial improvement from the Rs. 142.74 million loss recorded in FY2024/25. This positive shift underscores the effectiveness of the management’s focused strategies.
Key financial highlights from the Annual Report 2025/26 include:
- Revenue: Grew by 3% to Rs. 1.88 billion.
- Loss before Tax: Increased to Rs. (234.84) million from Rs. (152.68) million in the previous year, primarily due to higher administrative and operating expenses.
- Loss after Tax: Reduced by 32% to Rs. (97.41) million, benefiting from lower finance costs and a significant income tax reversal.
- Operating Profit: Declined by 43% to Rs. 116.29 million, reflecting pressure from increased indirect operating costs.
- Occupancy: Citrus Hikkaduwa achieved an average occupancy of 71%, surpassing its budgeted target of 60%.
- Total Borrowings: Decreased by 6% to Rs. 2.87 billion.
- Total Equity: Increased by 3% to Rs. 5.66 billion.
- Gearing: Improved by 6% to 33.66%.
- Debt/Equity Ratio: Strengthened by 9% to 50.74%.
Strategic Priorities and Operational Adaptations
The Chairman’s Message, Mr. S. P. S. Ranatunga, emphasized the delicate balance between opportunity and fragility in Sri Lanka’s tourism recovery. While the country welcomed a record 2.36 million visitors in 2025, geopolitical disruptions affected travel sentiment and increased operational pressures. In response, Hikkaduwa Beach Resort PLC focused on four strategic pillars:
- Effective Revenue Management: Optimizing revenue through strategic pricing, demand forecasting, and diversified market reach, including targeted digital marketing.
- Guest Experience: Enhancing dining, entertainment, and coastal propositions aligned with Hikkaduwa’s distinctive character.
- People Development: Strengthening service capabilities, employee engagement, and performance.
- Operational Efficiency: Implementing rigorous cost discipline, productivity improvements, and waste reduction initiatives.
The CEO, Mr. P. C. B. Talwatte, further elaborated on these efforts, noting that the hotel’s approach to guest experience now increasingly aligns with Hikkaduwa’s unique appeal, focusing on its beach, marine environment, dining, and vibrant social character.
Future Outlook and Property Enhancements
Looking ahead, Hikkaduwa Beach Resort PLC approaches the future with “measured optimism.” Following the close of the financial year, Citrus Hikkaduwa temporarily ceased operations during May and June 2026 to undertake a property enhancement programme. The resort successfully reopened in July 2026 with significant upgrades to key guest areas, including the restaurant. A new bar is also planned to further diversify the food, beverage, and entertainment offerings, solidifying Citrus Hikkaduwa’s position as a vibrant entertainment hub in the destination.
These investments will be complemented by a continued focus on digital distribution, employee development, and operational efficiency, aiming to drive sustainable and profitable revenue growth. At a national level, the report calls for a cohesive destination-marketing strategy, targeted international promotion, and continued infrastructure development to translate Sri Lanka’s strong appeal into higher-value tourism.
Corporate Governance and Risk Management
The Annual Report also highlights HBRP’s robust corporate governance framework and diligent risk management practices. The Board maintained stringent oversight of financial performance, internal controls, and adherence to regulatory requirements, crucial in an industry susceptible to geopolitical, financial, and environmental uncertainties. Key risks identified and managed include geoeconomic instability, liquidity risks, margin pressure from escalating costs, and staff turnover.
Hikkaduwa Beach Resort PLC owns and operates Citrus Hikkaduwa, a 90-room beachfront hotel, and holds Waskaduwa Beach Resort PLC as a subsidiary, extending its presence across two distinct leisure destinations.
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