3Year-end forecasts for IHI plc indicate good news, showing that targets set for the current financial year will be reached. October results show growth of business, and EBITDA numbers are expected to better 2018 results. This year’s exchange rate fluctuations in key markets where IHI owns and operates hotels and real estate are expected to work in favour of the company’s consolidated results when converted into Euro. This reverses the negative trends in recent years in currencies such as Sterling and Rouble in relation to IHI’s businesses. Naturally, all this is positive news for this year’s net profit after tax though it must be added that it is too early at this stage to determine the impact of any valuation movements on investment properties or assets held by the Company. This could only be assessed at year’s end.
IHI owns or operates a diversified portfolio of Corinthia hotels and commercial real estate in Europe, the Gulf, Africa and the Mediterranean. This portfolio has grown in 2019 by way of a minority investment in a residential and hotel development in a prime site on Moscow’s main boulevard, as well as the entering into arrangements to develop and lease an iconic palace in central Rome, formerly the seat of the Bank of Italy. Both projects will feature a Corinthia Hotel, on completion. Besides, a further investment was made by IHI’s operating company Corinthia Hotels into the Global Hotels Alliance, a commercial organisation co-owned with five other global hotel brands providing marketing, distribution and loyalty program services to hotels worldwide.
In this year’s third quarter, a three-year agreement to provide white label management services to the Meydan Group for its two existing hotels in Dubai was completed as pre-agreed. Notwithstanding, the relationship with Meydan continues with the construction of a luxury beachfront Corinthia hotel, which is progressing well. The hotel is owned by Meydan and will be operated by Corinthia Hotels when completed in 2021.
IHI has also commenced a programme of asset disposals to realise capital gains in its financially maturing hotels besides releasing equity to fund further acquisitions across the world. An international marketing exercise conducted by international brokers for the sale of the Corinthia Hotel in Prague is underway, with bids expected to be further negotiated by the year’s end.
2019 will see the near completion of a three-year €14 million upgrade of the Corinthia in Lisbon, and a two-year €7m investment in the Corinthia Palace Hotel in Malta. Both projects will be completed by Q2 2020.
Other efforts include the consolidation of IHI’s industrial and event catering business in Malta, now trading as Corinthia Caterers.