International Hotel Investments register €11 million interim loss

International Hotel Investments has registered a loss after tax of €11.19 million for the interim January-June 2011 period compared to a loss of €9.19 million over the same period last year, despite a downturn in business at its Corinthia Hotel Tripoli in Libya.

The decrease in finance income and the increase in finance expenses have been due to the utilisation of bank balances and additional bank borrowings for the Group’s investment in London and the equity stake in Medina Tower.

The conflict in Libya in the past months impacted negatively both the operational capacity and the financial performance of the Corinthia Hotel Tripoli. “All expatriate staff were evacuated with the exception of a small nucleus of executives that is entrusted with managing the day-to-day operations with the primary objective of maximising revenues, matching costs with current demand levels, and maintaining and safeguarding the property.”

IHI said that although it is evident that the value of the property in Libya has been impaired, the extremely fluid and volatile situation in the country does not allow a reliable quantification of the anticipated decrease.

In the first six months of 2011 the Group registered consolidated revenues that are in line with those of the first six months of 2010 despite the downturn in business at the Corinthia Hotel Tripoli resulting from the current situation in Libya.

The Group’s other hotel properties achieved an overall growth of 20% compared to the corresponding period last year mainly reflecting the slow yet steady economic recovery which started to leave its positive effects in the last six months of last year.

The percentage increases in revenue were as follows: The Corinthia Hotel Lisbon and Corinthia Hotel Prague - 26%, the Corinthia Hotel St Petersburg - 23%, Corinthia Hotel St George’s Bay - 13%, and Corinthia Hotel Budapest - 11%. The Group’s internally developed global distribution system has continued to yield positive results generating higher revenues since its launch last year.

Direct and other operating costs were relatively unchanged relative to the comparative period. Whilst direct costs increased on account of the improved hotel occupancy levels, other operating costs decreased mainly as a result of measures taken at Corinthia Hotel Tripoli to reduce overhead costs and on account of the non recurrence of costs incurred in 2010.

Following the issue of 1.76 million bonus shares and buy-back programme in August 2010, 751,338 shares were bought back by the Company during 2010. The Company’s share capital was reduced in February 2011 following the statutory three-month notification period.