International Hotel Investments plc - Interim Results

On 29 August 2022, International Hotel Investments plc published its interim financial statements covering the six-month period ended 30 June 2022.

Despite the slow start to the year on account of the negative impact on the demand for travel from the spread of the Omicron variant, revenues increased markedly and reached €95.8 million compared to €34.6 million in H1 2021. Moreover, the amount of income recorded in the first half of 2022 represents 73% of the record revenue figure of €122.5 million generated in H1 2019 when comparing on a like-with-like basis after excluding the consolidated contribution of the Golden Sands Resort from the Group’s revenue figure of €95.8 million reported for H1 2022.

On the expenditure side, operating costs (net of exchange gains/losses) amounted to €91.2 million, thus resulting in an operating profit of €4.57 million compared to the loss of €18.5 million posted in the corresponding period in 2021. Excluding depreciation and amortisation charges (€14.4 million), IHI generated an EBITDA of €17.3 million which translated into a margin of 18.1%. In 2019, IHI had recorded an EBITDA of €27.1 million which translated into a margin of 22.2%.

The financial performance of the Group was negatively impacted by a drop of €1.63 million (H1 2021: gain of €0.63 million) in the fair value of financial assets but significantly boosted by a €10.5 million favourable net exchange difference on borrowings reflecting the positive impact on the Group’s loans denominated in Pound Sterling and Russian Rouble. Meanwhile, net finance costs increased by 6.1% to €12.6 million compared to €11.9 million in the first part of 2021.

After taking into account a marginal tax charge of €0.02 million and minority losses of €0.35 million, IHI posted a net profit of €1.15 million which represents a significant turnaround compared to the net loss of €22.3 million incurred in the first half of 2021.

The Statement of Financial Position as at 30 June 2022, when compared to the corresponding figures as at 31 December 2021, shows that IHI’s net assets surged by 7.3% to €670.3 million which, in turn, translates into a net asset value per share of €1.089. Total assets increased by 1.9% to €1.73 billion (including cash and bank balances of €70.6 million) whilst total liabilities contracted by 1.1% to €847.9 million. Total borrowings dropped by 5% to €640.8 million (when including lease liabilities amounting to €10.9 million, as well as other financial liabilities amounting to €26.9 million) whilst the Group’s gearing ratio slipped to 42.2% from 44.6% as at the end of 2021. In this respect, IHI also explained that in view of the geopolitical uncertainties amid the war between Russia and Ukraine, the Group decided to fully repay a loan of circa €40 million that was due to a Russian bank which also resulted in realised gains in currency exchange.


In their commentary, the Directors explained that whilst some of the Group’s hotels are performing ahead of 2019 levels (particularly the Corinthia Hotel London which should achieve full recovery by the end of 2022 in terms of revenue generation), other properties especially those that are dependent on conference business are recovering at a slower pace but their prospects for the coming months and 2023 are encouraging.

In all hotels and operations, the Group continues to adopt tight discipline despite the challenges related to labour shortages, high inflation, as well as the energy crisis in Europe. Meanwhile, although capital expenditure also remains tightly controlled, IHI continues to be focused on new projects. Indeed, works are now well underway on Corinthia properties in Doha, Rome, New York, and Bucharest, where Group subsidiaries are also involved as development partners, technical services providers, as well as hotel operators, with most of the capital funding for these projects being provided by third parties. These hotels are expected to open in phases as of 2023.

Furthermore, the redevelopment of the Grand Hotel Astoria in Brussels is ongoing with the main construction contract awarded to a renowned Belgian contractor. IHI has a 50% shareholding interest in this project which is expected to be completed in Q2 2024. Elsewhere in Malta, the Group has submitted plans for the building of a low-lying, highly landscaped resort for the site formerly known as ‘Hal Ferh’.