International Hotel Investments plc - Interim Results

On 30 August 2024, International Hotel Investments plc published its interim financial statements covering the six-month period ended 30 June 2024.

Revenues increased by 8.7% to a record (at interim stage) of €135.6 million compared to €124.7 million in H1 2023 as the Group saw an improvement in revenue from most of its hotels.

On the expenditure side, operating costs (net of exchange gains/losses) decreased by 3.9% to €125.8 million driven by higher direct costs and marketing expenses. In this respect, the Group explained that it is also incurring significant pre-opening costs and taking on senior personnel as it ramps up its activity, expertise, and resources in advance of the opening of several new, luxury Corinthia hotels.

As a result, operating profit improved to €9.76 million compared to €3.71 million recorded in the corresponding period last year. Excluding depreciation, amortisation, and one-off losses, EBITDA for the period amounted to €22.9 million (H1 2023: €18.7 million) which translates into an improved EBITDA margin of 16.9% (H1 2023: 15.0%).

Meanwhile, interest expenses increased markedly to €21.7 million compared to €17.3 million in the same period last year. Furthermore, IHI registered net exchange losses on borrowings amounting to €1.11 million, compared to a loss of €1.60 million in the first half of 2023.

The Group’s loss before tax amounted to €12.0 million compared to €14.7 million in the first half of 2023. After accounting for a tax credit of €1.82 million and losses attributable to non-controlling interests of €2.60 million, the net loss for the period attributable to IHI’s shareholders amounted to €7.58 million, in contrast to the net loss of €10.3 million posted in the first half of 2023.

The Statement of Financial Position as at 30 June 2024, when compared to the corresponding figures as at 31 December 2023 shows that total assets increased by 3.0% (or €52.5 million) to €1.82 billion, which includes a cash balance of €70.9 million. Total liabilities increased by 4.9% (or €45.5 million) to €977.5 million, which include total borrowings of €696.3 million and lease liabilities of €14.3 million. Shareholders’ funds grew by 0.6% (or €3.4 million) to €616.7 million, which translates into a net asset value per share of €1.002 (31 December 2023: €0.9961). The positive movement in shareholders’ funds is driven by a gain of €15.3 million in the translation reserve recognised in other comprehensive income.

Outlook

In their commentary, the Directors explained that management remains entirely focused on maintaining tight discipline on all operating costs whilst offering quality service. Nonetheless, the revenue targets for the year remain in line with original forecasts.

With respect to the growth strategy through management agreements, works are underway on projects in Doha, New York, Riyadh, Maldives and Bucharest. These hotels are expected to open in phases with those in Bucharest and New York opening in the next months.

Further growth is also anticipated through the capital investment in the redevelopment of the Grand Hotel Astoria in Brussels (50% owned) with an opening target date of Q4 2024. Meanwhile, the leased property to operate a luxury hotel in Rome is expected to be handed over in the third quarter of 2025.