On 31 August 2020, International Hotel Investments plc published an updated Financial Analysis Summary (“FAS”) providing an overview of the company’s financial results in 2019, a comparison of the 2019 actual results with the forecasts published in the previous FAS dated 28 June 2019, as well as the forecasts for the current financial year ending 31 December 2020.
The following are the main highlights of the expected financial performance and financial position of International Hotel Investments plc in 2020:
- Revenues are anticipated to drop by 65.3% (or -€175.1 million) to €93.2 million reflecting the significant disruptions to the hotel business brought about by the ‘COVID-19’ pandemic.
- Although operating expenses are expected to drop by half to €98.4 million, IHI is anticipating a negative EBITDA for the year of €5.19 million compared to a positive EBITDA of €69.8 million in the 2019 financial year.
- Overall, IHI is forecasting a net loss of €57.4 million (compared to a net profit of €5.12 million in 2019) and also to end the 2020 financial year with a cash balance of €44.7 million compared to €72.7 million as at 31 December 2019.
- Total borrowings are expected to increase by 2.7% to €622.8 million (including lease liabilities amounting to €18 million) whilst net debt is anticipated to rise to €572.5 million (31 December 2019: €530.1 million) reflecting the considerable forecasted drop in cash reserves as well as the €11.8 million increase in bank borrowings to €381.8 million.
- The gearing ratio (calculated as total debt divided by total debt plus equity) is anticipated to increase to 43.6% (31 December 2019: 40.3%). Furthermore, given the expected sharp drop in EBITDA to a negative €5.19 million, IHI is not expecting to generate enough earnings to cover its net finance costs amounting to €23.8 million.