IHI plc registers loss of €10.7 million, revenues up by two per cent

IHI registered a loss after tax of €10.7 million in 2011 – an improvement on the previous year’s loss after tax of €13.1 million – and posted group consolidated revenues of €104 million, two per cent higher than those registered in 2010.

Despite the eight-month conflict in Libya where the group has a major property, International Hotel Investments plc registered earnings before interest, depreciation, tax and amortisation of €22.4 million for the year ended December 31, 2011, just €0.5 million below the EBITDA in 2010.

The Maltese-registered international hotel chain owns and operates hotels in Malta, Budapest, Lisbon, London, Prague, St Petersburg and Tripoli under the Corinthia brand.

While most expatriates working in Libya left the country as the hostilities began in mid-February last year and hotels closed, a nucleus of foreign executives supported the local staff and managed to keep the Corinthia Hotel Tripoli open throughout the year, IHI said.

The Tripoli hotel registered an operating profit of €9.8 million while not sustaining any structural damage in the uprising.

“This act of bravery not only helped the hotel in registering a modest profit in exceptional circumstances despite a drop in revenue of 35 per cent – equivalent to €10.6 million – but more importantly, in keeping the property unscratched while other hotels were severely looted,” IHI said.

All other group properties registered healthier occupancies, revenues and operating profits. Corinthia St Petersburg registered a growth in revenues of 24 per cent. Hotels in Lisbon and Prague each registered an 18 per cent improvement.

“This performance gains in significance when one considers the bleak economic performance of the European countries where the group’s hotels are located and, in particular, the financial crisis in these countries. It is, however, important to note that these higher levels of performance in all the group’s hotels, except Tripoli, are underpinned by the increased volume of business that is being driven by the group’s developed distribution and reservation system which was launched in August 2010.”

Last year was an important year for IHI as the flagship hotel in London was completed and the property was gradually launched internationally. The development encountered its fair share of challenges – on its launch it had to deal with sanctions imposed following the start of the Libya hostilities just before Corinthia Hotel London’s soft opening.

IHI said the group adopted a determined approach in obtaining licences in various jurisdictions to neutralise the effect of sanctions, and to gain market share progressively in consequence of the superior offering both in terms of product and service: Corinthia Hotel London is today ranked among the best in the luxury sector.

The management of the Corinthia Hotel London took over all the remaining room stock, spa and designer suites so that by the end of the year the property was fully operational. The adjoining 12 apartments located in Whitehall Place are now close to completion and work is expected to be finished by mid-2012.

The group also concluded a new credit facility agreement for €50 million secured by its property in St Petersburg. The bank loan was fully drawn down by the year’s end.

“Despite the difficult market environment both in terms of the economic situation and the financial position of a number of European countries in the eurozone area, 2012 promises to be a good year for the IHI Group, and, save any calamities, the results for the current year should reflect improved performance as the hotels move closer to their operational maturity,” IHI said.

Last month, the group acquired the Marina Hotel from its parent company. The proximity of the Corinthia Hotel St George’s Bay and the Marina Hotel will result in better optimisation of the two properties.