International Hotel Investments plc - Interim Results

At a meeting held on 30 August 2007, the Board of Directors of International Hotel Investments plc approved for publication the Half-Yearly financial statements as at 30 June 2007.

During the first six months of 2007, total revenue generated by the IHI Group amounted to €38.8 million, representing a 39% increase over the same period last year. This increase resulted from improved turnover levels across all the Group’s hotels with the Corinthia San Gorg Hotel in Malta and the Corinthia Lisboa Hotel in Portugal registering the strongest growth rates of 45% and 14% respectively. The inclusion of CHI Ltd. as a Group subsidiary as from October 2006 also helped to increase IHI’s revenue compared to last year. Moreover, as from 1 June 2007, IHI acquired the Corinthia Bab Africa Hotel and Commercial Centre in Libya and the Corinthia Towers Hotel in the Czech Republic which also contributed to the Group’s turnover.

Although direct costs increased by 40% to €25.3 million, the IHI Group’s gross profit climbed by 36.8% to €13.5 million in the first half of the year. Operating costs rose by 6.2% during the period under review to €9.3 million resulting in a Group operating profit of €4.2 million compared to only €1.1 million in the first half of 2006.

Earnings before interest, tax, depreciation and amortisation (EBITDA) of €10.1 million in the first six months of 2007 represents a 75% increase from same period last year with the EBITDA margin improving to 26.1% (June 2006: 20.7%).

Net financing costs increased to €5.9 million resulting from the increase in interest rates as well as the additional debt following the acquisition of the two hotels in Libya and Czech Republic.

The IHI Group incurred a loss before tax of €1.6 million compared to the loss of €3.3 million during the comparative period. After accounting for taxation and the profit attributable to minority interests, the Group’s loss for the first half of 2007 amounted to €2.2 million. The minority interest refers to Wyndham’s 30% equity stake in CHI Limited, with the balance of 70% held by IHI. In the Half-Yearly Report the Directors stated that had the recently acquired properties been included in the Group’s financial statements as from 1 January 2007, IHI would have generated a profit of €1.3 million during the first half of the year.

Total assets of the IHI Group climbed to €886.9 million as at 30 June 2007 following the acquisition of the hotels in Libya and Czech Republic. Shareholders’ funds increased to €478.5 million reflecting the issue of 192 million shares to Corinthia Palace Hotel Co. Ltd. as part consideration for the acquisition of the new hotels and the issue of 105 million shares to Istithmar hotels FZE of Dubai. A further 73 million shares were allotted to Istithmar at the end of August 2007, increasing the Group’s shareholders’ funds to €551.5 million. IHI’s share capital rose to 537,099,977 shares on 5 September 2007. The net asset value per share is now at €1.03.

Following the cash injection of €178 million by Istithmar, IHI will be increasing its borrowings in order to purchase up to an additional 5 hotels, thus bringing the Group’s total hotel portfolio to 11 properties. The Company is reported to be currently reviewing a number of properties mainly in Central and Eastern Europe. During a stockbrokers’ meeting with the Company held on 14 May 2007, IHI’s executives explained that discussions are being held with a number of property owners in Russia, Poland, Ukraine and Kazakhstan. IHI is also seeking to invest in a developed market such as London or Paris in order to balance the overall risk profile of its hotel portfolio and improve CHI’s brand image following its agreement with Wyndham Hotel Group.

The Directors noted in the Half-Yearly Report that the addition of the Corinthia Bab Africa Hotel and Commercial Centre in Libya and the Corinthia Towers Hotel in the Czech Republic should have a significant positive impact on the Group’s results during the second half of the year. Moreover the other 4 hotels are also expected to register an improvement over 2006 notwithstanding the current extension of the Nevskij Palace Hotel and the refurbishment of 248 rooms in the Corinthia Lisboa Hotel in Portugal. In the recent Shareholder Circular it was revealed that the Directors estimate a Group pre-tax profit of €3.1 million in 2007 compared to a pre-tax loss of €10.7 million incurred in 2006.

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