IHI plc reduces half-year post-tax loss to €9.7 million
International Hotel Investments plc registered a half-year loss after taxof €9.7 million compared to a lossof €11.2 million in the same period last year.
The investment company is involved in the ownership, development and operation of hotels under the Corinthia brand, leisure facilities and other activities in tourism and commercial centres. The company has wholly-owned subsidiaries and investments in associate companies through which it promotes the business of the group.
In the first six months to June 30, the group registered an increase in consolidated revenues of 16 per cent compared with those of the first six months of 2011. The Marina Hotel, which was acquired in early 2012, accounted for 5.6 percentage points of this increase. The remaining 10.4 percentage points were contributed by Corinthia Hotel St Petersburg, Corinthia Hotel Tripoli and CHI Limited, the group’s operating arm.
The Tripoli property is achieving good results considering recent developments in Libya, while the hotel in St Petersburg is achieving significant year-on-year improvements as it further consolidates its market position.
The Corinthia Hotel London, already recognised among the luxury hotels in the city, also had a very encouraging performance in the first six months of the year, but being an associate, the results of this operation are shown with the share of equity accounted investments.
The increase in direct costs reflects the improved hotel occupancy levels achieved by the properties and the costs incurred by the Marina Hotel, which is reported for the first time this year. Other operating costs were affected by the return to normal operations at the Corinthia Hotel Tripoli which last year were heavily curtailed in view of the conflict.
The group registered an operating profit before depreciation and amortisation of €13.5 million compared to €9.8 million in the corresponding period last year.
The improvement in finance income is due to interest income earned on the development loans advanced to Corinthia Hotel London and on exchange fluctuations registered on these loans denominated in sterling. Exchange losses registered last year on these loans were recorded with finance costs.
The increase in finance costs reflects the interest costs of new bank facilities concluded and fully used in the latter half of last year.
On the expectation of higher future interest base rates, the fair value of the interest rate swaps held by the group improved by €0.6million from the position recorded last December.
The share of loss from equity-accounted investments reflects the six months’ operational activity at the Corinthia Hotel London.
Last May, the group acquired the 30 per cent share in CHI Limited that it did not previously own. The group’s working capital as at June 30 shows a deficiency of €36.1 million. This includes the €22.1 million bond maturing next February which is now being classified under current liabilities as it is repayable within the next 12 months. The board is considering issuing a new bond prior to the maturity of this bond, subject to the required approvals of the MFSA, and the disposal of non-core assets to address the working capital deficiency.
The group is in the process of making presentations to global institutional investors to invite them to participate in the subscription of new shares with a view of raising new equity capital through private placements.