International Hotel Investments plc - Full-Year Results

On 30 April 2019, International Hotel Investments plc (“IHI”) published its Annual Report and Financial Statements for the year ended 31 December 2018. It is important to highlight that the comparative figures for 2017 were restated in view of the recognition of new accounting standards and interpretations. 

Performance Overview

During 2018, IHI generated revenues of €256.3 million, representing an increase of 5.7% over the previous corresponding period as all of IHI’s business segments reported growth except rental of investment property (-4.6%). Revenues from the hotels segment surged by 7% to €209.5 million, largely driven by the inclusion of the Corinthia Hotel Attard which was acquired by IHI on 10 April 2018 as well as the robust performances of the hotels located in London (+€2.22 million in revenues), Tripoli (+€1.78 million) and Portugal (+€1.66 million). Likewise, IHI’s catering business and QP Limited (which is the Group’s project management arm) reported strong increases in revenue of 7.4% and 51.2% to €24.8 million and €5.96 million respectively. 

On the expenditure side, total costs increased by 5.9% to €222 million (2017: €209.6 million) reflecting the growth in the business as well as additional investments in HR. Excluding depreciation and amortisation (which amounted to €33.2 million), EBITDA expanded by 5.6% to €67.5 million whilst the EBITDA margin remained virtually unchanged at just over 26%. On an adjusted basis (i.e. when excluding the 50% share of EBITDA generated by the Corinthia Hotel London and the Radisson Blu Resort Golden Sands that are not owned by IHI), adjusted EBITDA increased by 5.8% to €61.3 million compared to just under €58 million in the 2017.

The financial performance of IHI in 2018 was positively impacted by a €6.99 million fair value gain on investment properties compared to a fair value movement of just €0.28 million in 2017. Furthermore, IHI reported a lower impairment loss attributable to intangibles of €1.98 million compared to an impairment loss of €3 million in 2017. The impairment loss incurred in 2018 is related to the brand value of the Island Caterers brand and the Costa Coffee operations in Spain which is now fully impaired. On the other hand, IHI posted a €1.07 million loss on property, plant and equipment which is higher than the loss of €0.38 million reported in the previous comparable period.

Overall, the results from operating activities (“EBIT”) show an increase of 12.3% to €38.4 million compared to €34.2 million in 2017.

In 2018, net finance costs amounted to €20.5 million which is slightly lower than the corresponding figure of €21 million for 2017. Moreover, in 2018 IHI reported a lower share of net loss from associates/joint-ventures as this amounted to €1.36 million compared to a loss of €1.53 million in 2017. Similarly, the financial performance of IHI was not negatively impacted by any losses arising from the reclassification of currency translation reserves of NLI Holding Limited (the owner of the Corinthia Hotel London and the adjoining penthouse apartment) which, in 2017, had amounted to €1.81 million after IHI acquired control of NLI Holdings Limited. On the other hand, unfavourable net foreign exchange difference on borrowings amounted to €8.03 million in 2018 which is much higher than the negative movement of €3.24 million reported in the previous year. These losses largely reflect adverse foreign currency movements and are mainly related to IHI’s hotels located in St Petersburg and London.

In aggregate, IHI’s pre-tax profits rose by 28% to €8.47 million compared to €6.62 million in 2017. After accounting for a marginal tax expense of less than €0.01 million (2017: tax income of €5.29 million) and a loss of €2.89 million pertaining to minority interests (2017: profit of €3.18 million), the net profit attributable to the shareholders of the company amounted to €11.4 million compared to €8.73 million in 2017.

The Statement of Financial Position as at 31 December 2018 shows that total assets increased by 1.6% to €1.62 billion largely driven by higher amounts of property, plant and equipment as well as trade and other receivables. Similarly, total liabilities grew by 1.8% to €740.2 million as total borrowings increased by 1.6% to €565.2 million (31 December 2017: €556.2 million) whilst trade and other payables climbed by almost 24% to €71.5 million. Shareholders’ funds expanded by 2.1% to €683.4 million which, in turn, translates into a net asset value per share of €1.1099 (31 December 2017: €1.0866).


The Board of Directors of IHI will be recommending a net dividend per share of €0.02 at the forthcoming Annual General Meeting which is scheduled to be held on 13 June 2019. The dividend will be paid on 5 July 2019 to all shareholders as at close of trading on Wednesday 26 June 2019.


In their commentary, the Directors noted the Group’s positive performance in 2018 which, in turn, translated into higher profitability for IHI. Looking ahead, the Group will continue to pursue new growth opportunities that will complement existing initiatives that are already underway, namely the Corinthia Meydan Beach Hotel Dubai (opening in 2020), the Corinthia Hotel Bucharest (opening in 2020), the Corinthia Hotel Brussels (opening in 2021) and the Corinthia Hotel & residences Moscow (opening in 2022).

With respect to the St. George’s Bay project, the Directors explained that plans have now been finalised for the conversion of the existing Corinthia Hotel St George’s Bay into a six-star 220-bedroom luxury hotel. Given the extent and scope of the location, IHI is also negotiating terms with the Government of Malta to allow the redevelopment of the St George’s peninsula site into a mixed-use destination, featuring luxury branded residences alongside another five-star hotel to replace the existing IHI hotels. Negotiations on the form and value of the Group’s restated land title are ongoing and will require a number of regulatory and Parliamentary processes to be finalised.


International Hotel Investments plc – 2018 Annual Report & Financial Statements.