International Hotel Investments plc - Interim Directors’ Statement

On 5 November 2019, International Hotel Investments plc issued an Interim Directors’ Statement explaining the Group’s performance since the start of the year as well as an overview of the main milestones achieved. In this respect, IHI stated that year-end forecasts continue to show that targets set for the current financial year ending on 31 December 2019 will be reached with EBITDA numbers expected to outperform 2018 results since excluding any major extraordinary events, the Group’s outlook remains positive. IHI had indicated in the Financial Analysis Summary dated 28 June 2019 that consolidated EBITDA would grow by 6.5% to €70.7 million in the 2019 financial year.

Furthermore, IHI explained in the Interim Directors’ Statement that exchange rate fluctuations in key markets where it owns and operates hotels and real estate (namely Russia and the UK) are expected to work in favour of the Group’s consolidated financial results, thus reversing the negative trends experienced in recent years. As a result, although it is too early for IHI to determine the impact of any valuation movements on investment properties or assets held by the Group, profits after tax are likely to be impacted positively.

IHI made reference to the more important achievements registered during the course of this year, including the minority stake in a new residential and hotel development in a prime site on Moscow’s main boulevard, as well as the more recent agreements for the development, lease and operation of a new luxury hotel in central Rome. Furthermore, IHI noted its investment in the ‘Global Hotel Alliance’ which is a commercial organisation co-owned with five other global hotel brands providing marketing, distribution and loyalty program services to hotels worldwide. Meanwhile, despite the completion of the three-year agreements with the Meydan Group for the management of its two existing hotels, the relationship with Meydan remains in place as works on the construction of the luxury beachfront Corinthia hotel (owned by Meydan) continue to progress well and on target to be completed in 2021.

IHI also made further progress in its commitment to commence a programme of asset disposals, having as its main aim the realisation of capital gains from financially mature hotels besides the releasing of equity to fund further acquisitions across the world. In this respect, a marketing exercise conducted by international brokers for the sale of the Corinthia Hotel in Prague is underway, with bids expected to be further negotiated by the year’s end.

With respect to ongoing capital improvements to existing properties, IHI noted the near completion of a three-year €14 million upgrade of the Corinthia in Lisbon, as well as the near completion of a two-year €7 million investment in the Corinthia Palace Hotel, Attard. Both projects will be completed by Q2 2020. Other efforts include the consolidation of IHI’s industrial and event catering business in Malta, which is now branded under a single entity as ‘Corinthia Caterers’.