IHI registers improved operational performance in interim 2013

IHI generated €16.3 million in Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) for the period January to June 2013, a significant improvement over the preceding year's results. The better performance results from improved trading results all-round, in particular in St Petersburg, Russia, and Tripoli, Libya.

The group's EBITDA covers the results of its wholly-owned hotels and commercial real estate in Malta, Russia, Hungary, Czech Republic, Libya and Portugal but excludes the results of its 50 per cent share in the Corinthia Hotel and Residences in London, which are accounted separately.

The London flagship hotel, which is rapidly making its mark as one of the leading luxury hotels in the United Kingdom, delivered an EBITDA of GBP 3.6 million in the first six months of 2013 compared to a loss of GBP 0.8 million in the corresponding six months in 2012. This improvement in performance is in line with the expected hotel's growth to maturity over 2013, 2014 and beyond, following the inaugural year in 2012. Since IHI owns 50 per cent of the London hotel, its results are reported as an equity investment below EBITDA.

The directors of IHI noted that the improved results all round have been achieved in spite of challenging economic circumstances in several of the countries hosting its hotel and commercial real estate investments. The results reflect significant strides being made by Corinthia Hotels, the company's operating arm, in repositioning the Corinthia Brand as a five-star operation, backed by a global sales and marketing reach across the main source markets in Europe. The company is also focusing on its online presence, via its own websites and social media strategies, with direct, online bookings now accounting for more than 20 per cent of annual revenues.

Other major developments in the first six months of 2013 include the increase in rental income from the commercial centre adjoining the hotel in St Petersburg, now topping an annualized €4.4 million in rents, up from €2.5 million last year.  In London, as mentioned at the Annual General Meeting, management is actively pursuing the sale of the 12 luxury apartments on Whitehall Place and further announcements will be made as progress is registered.

Moreover, IHI also continues to progress on the initial work required for the eventual sale of the commercial centre in St Petersburg.

The positive trends recorded in the first half of 2013 are expected to continue through the second half of the year.