Market reacts positively to IHI profit announcement

There was an immediate positive reaction to the announcement by International Hotel Investments - which posted a pre-tax profit of €14 million (Lm6.01 million) for 2007 compared to a loss of €10.7 million (Lm4.59 million) the year before - with the price of shares rising by €0.07 (Lm0.03,1).

The Malta Stock Exchange reported that 32,669 shares were exchanged over nine deals on Wednesday, when the announcement was made. The share price rose by 6.9 per cent, closing at the yearly high of €1.08 (Lm0.46).

IHI said its hotels had seen higher turnover and profitability and the results were positively affected by the contribution made by the newly-acquired Corinthia Bab Africa Hotel and adjoining Commercial Centre in Tripoli and the Corinthia Hotel Prague. This, it pointed out, notwithstanding the fact that last year's results included only the performance of the last seven months of the year since acquisition.

Revenues rose to €104.1 million) Lm44.69 million) from €60.4 million (Lm25.93 million) in 2006 and the operating profit before a revaluation to fair value of investment properties net of impairment losses was €16.1 million (Lm6.91 million) compared to a profit of €3.1 million (Lm1.33 million) a year earlier.

The group said that during 2007, the Nevskij Palace Hotel redevelopment project in St Petersburg progressed well and, upon completion towards the end of this year, the property will increase its room stock by a further 105 executive rooms from the present 285 and will enlarge the meetings and conference facilities. The project also entails the addition of 15,000 square metres of retail and office space for rental to third parties. The Corinthia Hotel Lisbon in Portugal has completed the refurbishment of the remaining 248 rooms, out of its total 517 room stock, which had only undergone a soft refurbishment in 2004. Moreover, a spa is being constructed and planned to be finished by mid-2008. In its outlook, IHI said the addition of the Corinthia Bab Africa Hotel & Commercial Centre and Corinthia Hotel Prague are expected to have a significant positive impact on its consolidated results which, in future, will reflect the full 12-month effect.

It was also expected that the other four hotel properties and CHI would continue to register improved trading performances until they all reach full maturity by the year 2010/1.