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Mumbai: Vacation ownership company Sterling Holiday Resorts (India) Ltd, which pioneered the concept of timeshare holidays in India, on Friday reported its first quarterly net profit in 16 years of existence, helped by better occupancy levels at its resorts.

Sterling made a consolidated net profit of 62 lakh in the June quarter, compared with a loss of 90 lakh in the year-ago period. Revenue rose 19.53% to 36.1 crore from 30.21 crore.

“We are making a net profit after 16 years purely based on performance. We had made net profit for one or two quarters with the help of extraordinary gains," managing director Ramesh Ramanathan said.

Sterling reported a 6 lakh net profit on a consolidated basis for the quarter ended 31 March, 2010, and a 54 lakh net profit for the quarter ended 30 June 2009, aided by one-off gains, according to Mint Research.

The company had fallen short of investor expectations after a brief period of explosive post-launch growth. Customers started demanding their money back as properties went into disrepair.

The turnaround process began when private equity firm Bay Capital Partners Ltd invested $13.8 million in 2009 and R. Subramanian, Sterling’s chairman and managing director, ceded management control. It helped that Siddharth Mehta, Bay Capital’s chief executive, and Subramanian’s son, S. Sidharth Shankar, were schoolmates.

Subramanian remains a silent investor in the company, which has paid back 280 crore of growth by selling so-called non-core real estate to software companies, settled 90% of the cases against it and hired former employee Ramanathanan as managing director.

Mehta, who is also chairman of Sterling Holidays, said the company was working toward a turnaround and creating a strong brand in the marketplace.

“I am pleased that the investments made in the last few years to substantially raise the standards of our resorts and holiday experience have begun to yield results," he said.

Sterling Holiday has a total membership of 70,000 and added 830 members in the June quarter. The company said in a statement that occupancy rose to 65% in the June quarter from 52% a year ago, owing to vacation ownership members and non-members holidaying at its resorts. It has 1,512 rooms across 19 resorts.

“We are tapping all revenue sources including adding new members and getting non-members to stay in our resorts," said Ramanathan, who had earlier been managing director at Mahindra Holidays, India’s largest vacation ownership company.

Ramanathan said his company has no plans to raise funds, but may look at securitizing receivables worth 107 crore to finance capital expenditure. The company has total debt of 37 crore.

Shares of Sterling Holiday Resorts rose 1.41% to 61.25 apiece on BSE on Friday.

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