On 24 August International Hotel Investments plc published its interim results covering the six month period to 30 June 2012.
Group turnover (excluding the London Hotel which is 50% owned and accounted for as an associate company) increased by 16% to €56.5 million with the recently acquired Marina Hotel in St. Julian’s Malta contributing 5.6 percentage points to the improved revenue. The other contributors to the improved revenue generation were the hotels in St. Petersburg and Tripoli as well as the management arm CHI Limited. In the announcement, it was revealed that in May 2012, IHI acquired the remaining 30% in CHI Limited and this became a fully-owned subsidiary of the Group.
The Tripoli hotel achieved an EBITDA of €3.2 million compared to €1 million in the first half of last year. The performance of the Libyan property in 2011 was naturally impacted by the unrest in Libya at the time. The Directors reported that the hotel in Tripoli is achieving good results considering the recent developments in the country. Meanwhile, the Directors also indicated that the hotel in St. Petersburg continues to achieve significant year-on-year improvements as it further consolidates its market position.
Direct costs increased by 10.4% to €29.3 million which reflect the improved hotel occupancy levels and the costs of the newly-acquired Marina Hotel. Other operating costs, which totalled €13.7 million (H1 2011: €12.3 million), were also affected by the return to normal operations at the Corinthia Hotel Tripoli as well as the one-off charge of €1 million related to the acquisition of the Marina Hotel.
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) climbed by 37.7% to €13.5 million and after accounting for depreciation and amortisation of €11.9 million, the operating profit stood at €1.6 million compared to an operating loss of €2.3 million reported during the same period last year.
Despite reporting a turnaround in operating profit, the IHI Group reported a loss before tax of €12.6 million compared to a pre-tax loss of €14.7 million reported in the first half of 2011. The loss before tax consists of the share of loss from the London property and net finance costs. During the first half of 2012, the share of loss from the London property of €7.2 million reflected a full six-month operational performance and the depreciation and finance costs attached to this development. Overall, Group net finance costs edged marginally lower to €6.95 million as it reported an improvement in finance income due to interest income earned on the development loans advanced to Corinthia Hotel London and on exchange fluctuations registered on these loans which are denominated in GBP.
During the first half of 2012, the IHI Group reported a loss after tax of €9.5 million.
The balance sheet as at 30 June 2012 shows total assets of €1.08 billion comprising current assets of €68.5 million. On the other hand, current liabilities amount to €104.6 million, giving a negative working capital of €36.1 million. The Directors noted that current liabilities include the €22.1 million bonds maturing on 15 February 2013 and the Board is considering issuing a new bond to re-finance the maturity bonds. Furthermore, IHI stated that it is considering disposing of non-core assets to address the liquidity issues.
Shareholders’ equity as at 30 June 2012 stood at €594.4 million giving a net asset value per share of €1.07. The Board of Directors stated that further to the announcement issued in April 2012, IHI is in the process of making presentations to a number of global institutional investors inviting them to participate in the subscription of new shares with a view of raising new equity through a private placement.