International Hotel Investments (IHI), the publicly traded company of the Corinthia Group, has reported a 30 per cent rise in operating profit for 2015.
The group registered net property uplifts, before tax, of €42.6 million on account of the improved trading performance of its hotels in Europe.
This contrasts sharply with the net impairment charge, before tax, of €24.4 million registered in 2014.
At December 31, 2015, the group’s current liabilities exceeded its current assets by €31.6 million, compared to €12.1 million reported as at December 31, 2014. The financial report said the main reason for the increase was the amount of €22 millionrepresenting the second tranche for the acquisition of the Island Resort Hotels Group Holdings.
The gap is being tackled through a number of financing initiatives to generate a net total of €42 million in fresh funds.
Although the working capital position, excluding the IHGH commitment, is not projected to change significantly in 2016, the group said it expected to generate sufficient excess cash flow from operations, after deducting interest costs, capital expenditure and tax payments, to sustain its ongoing operations and maintain its working capital within manageable levels.
The company’s operating profit (Ebitda) for last year stood at €44 million compared with €34 million in 2014, marking an increase of €10 million. The above figure includes earnings from wholly-owned subsidiary companies as well as from companies in which IHI has a 50 per cent share.
The performance was better year-on-year in the IHI hotels located in Malta, Hungary, Czech Republic, Portugal and in IHI’s associate, the Corinthia London Hotel.
The incident at the Corinthia Hotel in Tripoli in January 2015 resulted in a considerable reduction in turnover and Ebitda earnings from the hotel operation.
“Different plausible scenarios may impact the financial performance of the Libya operations and the valuation of related assets in a significant matter.
“This matter is considered to be of fundamental importance to the users’ understanding of the financial statements because of the potential impact that this uncertainty may have on the valuation of the Group’s assets in Libya, which at December 31, 2015 were carried at €194.8 million,” the auditors noted.
As a result of the exchange rate of the rouble IHI also changed its marketing strategy in St Petersburg with a higher focus on the domestic Russian market. The group is pursuing other opportunities for the development and management of new luxury Corinthia hotels in cities such as Dubai, Rome, Brussels and Abuja, where in some cases negotiations have advanced significantly in recent months and binding agreements are expected to be signed in the first half of 2016.
Total revenue for the year under review amounted to €134.1 million compared to €116.4 million the year before.
IHI has approved a three per cent bonus share issue to all shareholders, which will be distributed from the company’s capital reserves.