IHI reports profit, turnover jump

International Hotel Investments (IHI) has reported a 65% jump in turnover for the first six months of this year and an increase in its operating profit compared to the same period last year.

It said turnover reached €64.31 million, mainly due to the fact that the results of both the Corinthia Bab Africa Hotel and Commercial Centre in Tripoli and the Corinthia Hotel Prague have now been included for the full six month period whereas in the comparative period they were only included for the month of June, being the month following acquisition.

All the other hotels in the group registered increases in their turnover levels except for the Corinthia Nevskij Palace Hotel in St Petersburg, which is undergoing reconstruction works as part of the project to upgrade the hotel and the adjacent properties.

The most notable achiever was the Corinthia Hotel Lisbon in Portugal with an increase of 28% in revenue following the completion in 2007 of the full refurbishment of 248 rooms of its 518-room stock.

The group said it made an operating profit of €11.00 million, an increase of €6.8 million on the profit registered last year.

In a review of performance, the group said the construction of the new Spa and Health Centre at the Corinthia Lisbon Hotel is now nearing completion and it is expected to be partially operational by the end of this month with full completion by the end of October 2008.

A full planning application has been submitted for the redevelopment of the Metropole Building and 10 Whitehall Place in London, following extensive consultations with the local authorities and neighbouring residents. The project will include a 299-room luxury Corinthia Hotel, a spa and 13 up-market apartments. Construction works are expected to start early next year and project completion is planned for the end of 2010.

IHI has a one-third ownership in this project and has been entrusted by its joint venture partners, Nakheel Hotels of Dubai and LFICO of Libya, to lead the development.

During the first six months of this year, IHI invested £18 million (€22.5 million) in NLI Ltd., the joint venture company set up for this purpose.

In February 2008 the group, in partnership with LFICO, committed itself to a mixed-use development of a 360-room five-star deluxe hotel, office and residential complex in Benghazi, Libya. The finalisation of the building permit and other groundwork for this project are in progress.

The group has recently announced the setting up of a 50:50 strategic investment partnership with Intourist for the joint development and operation of four- and five-star hotels across the Russian Federation. This joint venture will build upon the significant resources and extensive expertise of both parties with the ultimate intention of becoming the leading hotel chain in the Russian Federation. Currently the two parties are in the process of completing the necessary regulatory procedures to establish the joint venture companies.

The group warned that the positive outlook prevailing in 2007 in the hospitality industry is now facing the prospect of the challenges arising from the international credit crunch and inflationary pressures brought about by increases in commodity prices. “These factors have dampened the original outlook of the group’s activities for 2008 and these may have an impact on the value of some of the group’s properties at year end,” it said.

IHI said earlier this week that the new Lafico chairman Ibrahim Zletni has joined the IHI board.