The terrorist attack on the Corinthia Tripoli Hotel last month caused around €1 million in damage, the company has announced.
International Hotel Investments yesterday said that the damage was mostly confined to broken glass panes on the facades and repair work had already started.
However, reduced demand for hotel accommodation in the Libyan capital forced IHI to reduce operational costs “to a bare minimum”.
The hotel, which was the target of Islamic State-linked terrorists on January 27, remained closed but IHI insisted the commercial centre was not affected and continued to operate.
In its preliminary unaudited results for 2014 released yesterday, IHI said the Tripoli hotel registered an operating loss of €1.2 million last year, a significant downturn from the €6.6 million operating profit in 2013.
One can only hope for the return of normality to the city’s business climate
Corinthia estimated a loss of €852,000 from operations at the Tripoli hotel in 2015 as rental income projected at €5.6 million remained the only source of consolation.
IHI said its strategy was to reopen the hotel and achieve a break-even target. “One can only hope for the return of normality to the city’s business climate,” the statement said.
IHI’s hotel business grew last year but force majeure events in Libya and Russia dampened the results.
The St Petersburg Hotel registered reduced profits as a result of sanctions on Russia and the devaluation of the rouble.
The St Petersburg Hotel registered an operating profit of €2.9 million last year, down from €7.6 million in 2013.
“The rouble to euro rate has devalued from a rate in the 40s at the start of 2014 to one in the high 70s by year’s end; this in the wake of a collapse in the price of oil, which is a principle driver of the Russian economy,” IHI added.
IHI’s total gross operating profit in 2014 was €45.6 million, down from €52.4 in 2013.
However, apart from the Libya and Russia hotels, it reported an increase of 34 per cent in operating profit for its other Europe-wide hotel operations.
“The improvements... did not happen accidentally. They are the consequence of an overhaul of CHI [Corinthia Hotels International, the operating arm of IHI hotels], which is the guardian of our owned Corinthia brand,” the statement said.
The prestigious London hotel continued to generate handsome profits – €18.4 million in 2014. IHI half-owns the London operation.
In a geographical breakdown of the company’s Ebitda (an approximate measure of a company’s cash flow), IHI said it had a more even spread across the different countries of operation last year.
In 2009, two-thirds of the company’s earnings were generated by the Tripoli hotel. “We worked hard over the years to mitigate this risk by diversifying our Ebitda. In 2014 not one of our properties contributed more than 17 per cent of our Ebitda,” IHI said.
The largest contributor was IHI’s 50 per cent shareholding in the London operation.
kurt.sansone@timesofmalta.com