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IHI plc posts profit after tax
of Lm335,000
by Ivan Brincat
International Hotels Investment plc is going for growth and
wants to acquire at least one other property during the next
financial year.
IHI chairman Alfred Pisani said yesterday the company was also
interested in eventually listing on the London Stock Exchange
if the company reaches a good growth level.
The company’s main operations at present centre around
the Corinthia San Gorg and the refurbishment of the Corinthia
Grand Hotel Royal in Budapest, Hungary.
Over 60 per cent of the value of the contracts for the refurbishment
of the hotel have already been awarded.
Mr Pisani was speaking during the first annual general meeting
of the company which was listed on the Malta Stock Exchange
in May 2000.
The company chairman said IHI plc was looking at taking on board
a project which would not require huge amounts of capital but
would be a cash generating business.
He said industrial catering in the Mediterranean region was
a prospect the company was seriously considering, adding there
were various oil companies and oil rigs interested in the service.
“In the near future we hope to announce that we have entered
this field,” Mr Pisani said.
The idea behind this is to support the cash flow situation in
the company and supplement this with income while it is purchasing
property. “The aim is to generate cash with a low capital
requirement,” he said.
In the first annual general meeting, the company reported that
it had realised a profit after tax of Lm334,924. The company’s
main source of income was the interest receivable on funds which
arose from share capital and convertible bond issues, pending
utilisation of hotel investments.
The associate companies CHI Ltd and QPM Ltd made a profit of
Lm73,331 and Lm103,962 from the time of the acquisition of 20
per cent in March 2000. The latter has also been awarded the
contract for the Bank of Valletta Data Processing Centre as
well as a five-star Hotel and Commercial Centre in Sudan for
Libyan investors.
The directors did not propose the payment of a dividend to shareholders
with Mr Pisani adding that the company was looking for capital
growth.
The cost of the refurbishment of the Corinthia Grand Hotel Royal
in Budapest will reach US$65m. This is being financed from the
company’s capital and from a loan of US$42m from two leading
Hungarian banks OTP and K & H.
Work on the project is on schedule and the opening of the hotel
is planned for summer 2002. This five-star, 415-room hotel will
be among the finest hotels in central Europe and the best in
Hungary, Mr Pisani said.
The construction will be ready in February and will include
an historic underground spa, 24 deluxe apartments to be serviced
by the hotel, conference facilities and a 250-car car-park.
During the year under review Corinthia San Gorg Hotel achieved
an overall occupancy of 63.75 per cent resulting in a total
of 58,174 room nights.
Total revenue generated from the rooms division was in line
with that registered during the previous year while food and
beverage revenues during the year under review were Lm200,000
below last year. Reviewing IHI’s business development activities,
Mr Pisani said the company was looking at opportunities in Russia,
Croatia, Portugal and Morocco, adding that despite strenuous
and extensive preparatory work, including the setting up of
IHI-owned companies in Russia and Croatia, IHI was proceeding
with prudence to ensure that the best terms and conditions were
fully in place before making a long-term commitment.
The company has also looked at hotel projects in Sofia, Warsaw,
Moscow, Riga and Cairo.
The board of directors is looking forward to concluding some
of the negotiations. In Croatia, Russia, Morocco and Portugal,
the com-pany has already identified the properties and in some
cases significant progress has been made. Agreements with banks
on the funding of acquisition costs have also been reached.
Speaking on the share value, Mr Pisani said that the price of
86 cents on the MSE does not reflect the value of the company.
“We have invested well in the property in Budapest and
with the inclusion of the spa, a bridge to link two properties
and the construction, the value of the company has improved.
In reality the share price has gone down but the value of the
company is going up,” he said.
Mr Pisani informed the shareholders at the AGM that following
a call for nominations, Lawrence Zammit has been appointed to
the board of directors of IHI.
IHI was set up in March 2000 and is owned by the Corinthia Group
which has 75 per cent and the remaining 25 per cent is owned
by the 3,600 shareholders. It
wholly owns Five Star Hotel Limited and Corinthia Investments
Hungary KFT. Moreover, it has a 20 per cent shareholding in
CHI Ltd and another 20 per cent in Quality Project Management
Ltd.
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