International Hotel Investments plc - Full-Year Results

On 20 April 2022, International Hotel Investments plc (“IHI”) published its Annual Report and Financial Statements for the year ended 31 December 2021. 

Performance Overview

Revenues amounted to €129.3 million which although represents a significant rebound from the level of €91.9 million registered in 2020, they were still 52% lower than the record of €268.3 million posted in 2019. In this respect, IHI explained that the recovery in business achieved in the second half of the year was at times at par with 2019 although the emergence of the Omicron variant in latter part of the year disrupted the strength of the momentum.

Despite the substantial increase in turnover, operating costs only increased by 1.4% to €133.4 million as IHI continued to implement strict cost containment measures whilst also benefit from subsidies and funds made available by Governments. Excluding depreciation and amortisation, consolidated EBITDA amounted to €26.5 million (which translates into an EBITDA margin of 20.5%) compared to the negative EBITDA of €3.81 million recorded in 2020. Furthermore, the EBITDA when adjusted for the 50% share of Corinthia London which is not owned by IHI amounted to €22.7 million compared to -€3.17 million in 2020 and €60.3 million in 2019.

Meanwhile, the financial performance of IHI was negatively impacted by a number of non-cash line items (mainly pertaining to movements in the value of assets and foreign exchange) which, in aggregate, amounted to a charge of €12.1 million. Elsewhere, net finance costs increased to €24.5 million (2020: €22.9 million) as IHI took on additional borrowings which, net of cash, amounted to €572.7 million as at the end of 2021 compared to €556.8 million as at 31 December 2020. On the other hand, the share of profits from associates/joint ventures amounted to €1.12 million in 2021 compared to the loss of €2.45 million reported in 2020. In this respect, IHI noted that following the acquisition of the remaining 50% share of the Golden Sands Resort in February 2021, its only associate is now Medina Towers Joint Stock Company.

Overall, IHI reported a pre-tax loss of €39.6 million compared to the loss of €90.4 million recorded in 2020. After accounting for a tax credit of €9.26 million and a loss of €2.02 million pertaining to minority interests, the net loss for the year amounted to €28.3 million compared to the loss of €63.1 million posted in 2020.

The Statement of Financial Position as at 31 December 2021 shows that total assets increased by 9.8% to €1.7 billion largely driven by the higher level of cash balances as well as property, plant and equipment. Similarly, total liabilities increased by 11.2% to €857 million mainly due to the higher level of debt. Shareholders’ funds grew by 3.6% to €624.8 million which, in turn, translates into a net asset value per share of €1.0147 (31 December 2020: €0.9798).

Outlook

In their commentary, the Directors explained that although 2021 was another difficult year, the Group managed to achieve its targets including an EBITDA that is higher of net finance costs.

Looking ahead, IHI reiterated its projection of a recovery in revenues up to 2019 level by 2024. Moreover, the Group will continue to pursue its various projects with a view of further extending the Corinthia brand across the world. These include the development of Corinthia Oasis, the refurbishment of the Corinthia Palace Hotel and the Corinthia St George’s Bay, as well as new properties in Brussels, Bucharest, Roma, Doha, and New York.

In addition, IHI noted that it is focused in further expanding its interests in Libya and provide hotel management services for 4-star properties under a new brand.