International Hotel Investments plc - Full-Year Results

At a meeting held on 20 April 2007, the Board of Directors of International Hotel Investments plc approved for publication the financial statements for year ended 31 December 2006.

Total revenue generated by the IHI Group during 2006 amounted to €60.4 million, representing a 10.8% increase over the previous year. This increase resulted from improved performances of the Corinthia Lisboa Hotel in Lisbon and the Corinthia Grand Hotel Royal in Budapest. On the other hand, the Corinthia San Gorg Hotel in Malta generated lower revenues due to a reduction in the hotel’s room stock during the refurbishment works. The Group’s gross profit increased by 18.6% to €21.3 million with a margin of 35.3% (2005: 32.9%) whilst operating costs increased to €18.2 million. Earnings before interest, tax depreciation and amortisation (EBITDA) rose by 14.5% to €13.1 million with the EBITDA margin increasing to 21.6% (2005: 20.9%). The Group generated an operating profit before impairments in 2006 of €3.1 million compared to €1.4 million in 2005.

During the year the Group recognised a €7.15 million impairment loss on the Corinthia Lisboa Hotel following a lower value attributed to this hotel property by an independent expert who took into account the hotel’s expected future income streams and comparing the resultant present value to its current book value. However the Directors of IHI expressed their confidence that following the completion of the hotel’s spa and the full refurbishment during 2007 of 248 rooms from the total room stock of 518 rooms, coupled with the advantages from access to the Global Distribution Systems of Wyndham Hotel Group International, the Corinthia Lisboa Hotel will be in a better position to achieve its projected income streams.

On the other hand, during 2006, the Group recognised another €2.21 million increase in the value of the properties adjacent to the Corinthia Nevskij Palace Hotel in St. Petersburg, which are currently being developed into an extension to the hotel and a commercial area for lease as retail and office space.

Net financing costs amounted to €9.35 million resulting in a loss before tax of €10.7 million. After accounting for taxation and the loss attributable to the minority interest, the IHI Group’s loss in 2006 totalled €10.5 million. The minority interest refers to Wyndham’s 30% equity stake in CHI Limited, which started being consolidated in the Group’s financial statements as from 1 November 2006. Therefore the loss during 2006 refers to the last two trading months during the year.

Total assets of the IHI Group as at 31 December 2006 amounted to €432 million, representing a 15.5% increase from the level of assets in December 2005. Shareholders’ funds of €183.6 million translate into a net asset value per share of €1.13. The increase in shareholders’ funds follows the allotment of a total of 8.05 million new shares in the second half of 2006 to a number of institutional investors at a price of €1.00 per share.

Following the cash injection of €178 million by Istithmar Hotels FZE of Dubai, IHI intends increasing its debt further in order to purchase up to an additional 5 hotels, thus bringing the Group’s total portfolio to 11 properties. The Company is reportedly currently reviewing a number of properties around the world including central Asia, the Middle East, Russia and Europe.

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