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IHI EBITDA EARNINGS AT €35 MILLION

01/04/2015

IHI has announced an EBITDA profit in 2014 of €35 million, including its 50% share in the Corinthia Hotel in London.

Earnings Before Interest, Tax, Depreciation and Amortization in 2014 are the balance of record performances at each of the Company’s hotels in Malta, Prague, Budapest, Lisbon and London on the one hand, dampened on the other hand by significant external challenges to the Corinthia Hotels in Tripoli and St Petersburg.

EBITDA in the Corinthia Hotels in Prague, Budapest and Lisbon, as well as IHI’s Corinthia and Marina Hotels in St Julian’s Malta, increased 41% year on year over 2013, a creditable performance reflecting Corinthia’s increasing competitiveness in the global hotel markets. The Corinthia in London, of which IHI owns 50 per cent, maintained its steady consolidation among the city’s foremost luxury operations.

On the other hand, the sustained uncertainties in Tripoli throughout 2014, meant that net income from this investment was mostly limited to the €6 million annual rents derived from the continued occupation of the property’s commercial office wing by blue chip international oil firms.

Likewise, in St Petersburg, the cumulative effect of international sanctions on the Russian Federation and the devaluation of the Rouble impacted the profits of that hotel when measured in Euro. Major international events and meetings scheduled for the city throughout the year were cancelled or scaled down, whilst corporate travel to the city was down. Management shifted the hotel’s focus onto the important domestic Russian market, which now accounts for more than half of the hotel’s customers.

“2014 was a mixed year for us. We exceeded all expectations in almost all of our hotels thanks to our increasing capabilities as hotel operators and a globally recognized Corinthia Brand. We also maintained a watchful eye on external circumstances in Tripoli and Russia where we took a series of tough measures to mitigate the downturn in business in these operations. The net result is a positive and resilient performance when one considers all factors” said Alfred Pisani, Chairman of IHI.

As every year, the Directors have taken a view on the current value of each of the Company’s hotels and commercial properties. The hotels in Malta, Prague, Budapest, Lisbon and London were valued by an increased €45 million by independent parties, a result of higher earnings and brighter prospects. At the same time, the Directors, on the basis of expert advice, have agreed to reduce the value in the books of the Company of the hotels and commercial centers in Tripoli and St Petersburg by €70 million. The combined value of the Company’s assets remains just over €1 billion.

In 2014, the Company’s total indebtedness and liabilities further decreased by €49 million.