Island Hotels report profit 'in challenging times'

The Island Hotels Group has reported a pre-tax profit of €1,598,933, representing marginally over 15% of turnover of €10,595,633. Operating profit amounted € 2.1 million.

The results cover the three month trading results of the group's subsidiaries and jointly controlled entities from 31 July 2009, the date control was established, to 31 October 2009, together with the results of the holding company from 5 August 2008 (date of incorporation) to 31 October 2009.

The group said that if one had to analyse the proforma results of the full year of operation 1st November 2008 to 31st October 2009, as compared to the previous financial year 1st November 2007 to 31 October 2008, the group registered a drop in revenue of 14%.

It said that an internal drive to curtail operating expenditure resulted in a 12% saving in operating costs which in real terms resulted in reduced expenditure of just over € 3,100,000. As a result, comparative gross operating profit for the full 12 month period was € 8,834,554 compared to € 10,930,157 reported in the previous comparable 12 month period.

"This effectively is a reduction of just over 19% in gross operating profit which, although not ideal, is better than the industry averages, which are expected to be closer to drops of 40%.

Comparable profit before tax for the year was of € 3,264,043 (10% of turnover) as compared to € 4,839,195 (13% of turnover) for the previous comparable 12 month period.

The group said that 2009 was a very challenging year for the tourism industry locally, mainly as a result of the economic downturn experienced in all of Malta's core markets. The reduction in the number of visitors to the island as well as the drop in the average room rates in the industry, brought about by a decrease in demand, had resulted in a significant fall in performance across the Maltese tourism industry. In contrast to the overall industry performance, the group has registered a comparatively positive result mainly due to the mix of business models being used within the group's portfolio.

The board of directors is recommending the payment of a net dividend of € 423,230 (net € 0.012 per
share) payable from profits available for distribution as at 31 October 2009