On 31 August, International Hotel Investments plc published its 2010 interim results. The Group explained that its activities were hindered by the sluggish economic and business environment which continued to negatively affect the Group’s main markets. During the first six months of 2010, Group revenue declined to €49.4 million when compared to the €51.4 million registered in the first half of 2009 mainly due to the performance of the Corinthia Tripoli Hotel which was impacted by increased competition and by the general slowdown in business especially following the Swiss Libyan dispute which aggravated the situation in the Libyan market. IHI however explained that business is expected to stabilize at current levels. Notwithstanding the current environment and the slowdown in the Hotel in Libya, the Group managed to register a 3% increase in its ‘room revenue per available room’ during the first six months of 2010.
During the period under review, IHI’s finance income dropped when compared to the first six months of 2009 after the Group utilized its cash to fully fund the development project in St. Petersburg and increased its stake in the London Hotel from 33% to 50%. Meanwhile IHI’s finance costs increased as it raised additional financing through a bond issue during the second half of 2009.
The Group also incurred a fair value loss of €1.1 million on the two interest swap arrangements which it currently has in place for the Prague and Lisbon properties. IHI however explained that it is the Group’s intention to hold these instruments to maturity thus recovering these fair value movements over time.
Furthermore, IHI incurred a share of loss from its ‘equity accounted investments’ of €1.4 million which reflects the pre-opening and marketing costs that are being incurred by the Corinthia London Hotel in preparation for its opening which is planned for early next year.
The Group incurred a loss after tax of €9.19 million during the period under review compared to loss of €2.81 million incurred during the first half of 2009.
In the 2010 half-year report the Group explained that the development of the Corinthia Hotel and Residences in London is still on track and the hotel is expected to be completed towards the end of 2010. Moreover, work on both the spa and the adjoining twelve luxury apartments located in Whitehall Place are at an advanced stage.
IHI stated that its geographical diversification together with its occupancy-led strategy aimed at recovering volumes whilst containing costs are expected to mitigate the negative effects stemming from the uncertain operating climate. Even though the Group expects that IHI’s operating results for the second half of 2010 will be better than the first, the forecasted operating results for the full-year 2010 are anticipated to be lower than those achieved last year.
The Directors did not recommend the payment of an interim dividend.
Download a copy of the IHI 2010 Interim Results.