Issue link: https://maltatoday.uberflip.com/i/1472631
3 NEWS 7.7.2022 FROM PAGE 1 In FY2020, COVID had a significant impact on the global hotel industry as well as on the group's hotel opera- tions. Year-on-year revenue decreased by €155.6 million (-71%) from 2019. The group's management had imple- mented significant and effective cost containment measures to minimise the impact on EBITDA which could have been substantially worse oth- erwise. The relative governments also as- sisted in this regard through the in- troduction of different schemes, in- cluding salary subsidies and waiver or deferral of payroll taxes and social security contributions. Notwithstand- ing, the Group reported an EBITDA loss of €9.2 million (FY2019: + €50.9 million). The group is projecting that the con- solidated revenue levels will revert to pre COVID-19 benchmarks during 2024. The directors have acknowl- edged that the trajectory to such per- formance by the group will be depend- ent on the level of travel restrictions that are maintained by governments. In 2019, London operations ac- counted for 34% of revenues gen- erated, whilst Malta operations ac- counted for 22%. The London and Malta operations represented 51% of aggregate EBIT- DA which amounted to €50.9 million in FY2019 compared to €50.7 million in the prior year. In terms of EBITDA margin, Corin- thia Hotel St Petersburg was the best performer at 36.0% followed by Corin- thia Hotel Budapest at 29.2%. EBITDA recovered from a loss of €9.2 million in FY2020 to €16.2 mil- lion in FY2021. During the reviewed period, the Group's hotel operations reported an EBITDA margin of 15.7% (FY2020: -14.5%). After accounting for depreciation and amortisation, the Group's hotel operations registered a segment loss of €9.8 million compared to a loss of €32.9 million in FY2020 (FY2019: profit of €20.2 million). Ukraine war IHI Group owns a hotel in St Peters- burg, Russia, with an adjoining Com- mercial Centre which have been un- der IHI's ownership for 20 years. The group also owns a 10% equity share in a hotel and residences project in central Moscow. The combined interest in St Peters- burg and Moscow represents approxi- mately 8% of the Group's total revenue and assets in 2021. Sanctions imposed on Russia and counter sanctions that Russia itself has introduced are being carefully monitored and fully adhered to by IHI on the advice of its specialist legal advisors. The consequence of the cur- rent situation will depend largely on the duration of the conflict. Below is a list of ongoing projects. Corinthia Hotel Brussels (opening 2024) e project entails the development and opening of a grand luxury Corin- thia hotel in Brussels, Belgium. e owner of this investment is NLI Hold- ings Ltd, in which IHI has a 50% share- holding, and which is also the owner of the Corinthia Hotel and residential development in London. NLI acquired the former Grand Hotel Astoria in Brussels in 2016 for £11 million and a deferred interest free loan of €500,000 which has since been settled in full. e purchase was made through the acquisition of the entire issued share capital of the Belgian hotel-owning company, Hotel Astoria S.A. Once complete, the hotel will be operated by Corinthia Hotels Limited, another IHI subsidiary. Corinthia Meydan Beach Hotel IHI has exited from its involvement in this project in Dubai because of circumstances beyond its control. In 2016, CHL entered into a technical ser- vices and pre-opening services agree- ment with Meydan Group of Dubai for the development of a luxury hotel and residential development. Unfortu- nately, the pandemic forced a situation onto the developers to sell their prop- erty midway through construction to a new company that itself operates hotels locally in-house. In full coop- eration with the owners, IHI's oper- ating subsidiary, CHL agreed to sell its management and branding interests in the hotel in 2021 for $5 million. Corinthia Hotel Bucharest (opening 2023) In March 2018, CHL entered into a management agreement with the owners of the former Grand Hotel du Boulevard, to be redeveloped as the Corinthia Hotel Bucharest. Design de- velopment of the regeneration of this listed property is complete and works have commenced on site, to be complet- ed in July 2023. e reconstructed hotel will feature 33 luxury suites as well as the fully restored Grand Ballroom and various dining and leisure venues. Corinthia Palace Hotel Attard In April 2018, IHI acquired the Corinthia Palace Hotel in Attard through a new formed subsidiary from its ultimate parent, CPHCL Compa- ny Limited. e operating results and assets and liabilities of the acquired business have been consolidated with the Group as from 1 April 2018. Since its acquisition, IHI embarked on a sig- nificant improvement to the hotel's amenities and food and beverage fa- cilities. A wider refurbishment plan is now being planned, with design work well underway for most of the indoor and outdoor areas of the hotel, includ- ing all bedrooms and Villa Corinthia, the original high-end restaurant where CPHCL Company Limited started its journey in the hospitality industry, in 1962. Shareholding in GHA Holdings Limited In 2019, CHL acquired a 10% share- holding in GHA Holdings Limited (GHA). e other shareholders of GHA comprise Kempinski, Omni, Oracle, Pan Pacific and Minor Hotels. Since the said acquisition, it increased its shareholding in GHA to 13.1%. In December 2021, GHA successfully launched the updated global loyalty programme, with almost 10 million members, and now marketed as Dis- covery 2.0. e launch follows a period of investment in research, technology and marketing. Corinthia Hotel & Residences Moscow In February 2019, IHI acquired a 10% minority share for US$5.5 million in a company formed with a consortium of investors to acquire a landmark prop- erty at 10, Tverskaya Street, Moscow (the "Moscow Project"). e site is being developed into a mixed-use real estate project including a luxury bou- tique 42-room Corinthia hotel, 109 upmarket residential serviced apart- ments for re-sale, high-end retail, commercial outlets and underground parking. e asset is located on a pres- tigious boulevard in Moscow close to Red Square in a highly popular shop- ping, cultural and business location, as well as a luxury hotspot with other competing luxury brands, all in close proximity of each other. Corinthia Hotel Rome (opening 2023) CHL, through a lease agreement, will be operating a redeveloped hotel property in Rome which was acquired and is being funded through its extensive reconstruction and refurbishment by a third-party investor. e property is the former seat of the Bank of Italy in Parliament Square. Corinthia Hotel Residences Doha (opening 2022/23) CHL has signed an agreement with United Development Company (UDC), the Qatari master developer of e Pearl in Doha, to manage and operate a luxury Corinthia hotel being built on UDC's newest flagship real estate de- velopment, named Gewan Island. e Corinthia Hotel Doha occupies an area of 13,000m2 and will feature 110 gues- trooms, a 1,000-person banquet hall, several restaurants and a luxurious spa facility. e development will also include 18 nearby luxury branded vil- las for sale or lease, a golf course, and a beach club, all of which will be also managed by CHL under the Corinthia brand umbrella. Corinthia Oasis Project (formerly Hal Ferh Project) IHI owns an 83,000m2 brownfield beachfront site in the pristine, rural north of Malta. e Group Company has in 2021 completed the re-zoning of the site at Golden Bay to permit 25 low-rise luxury villas alongside a 162- room luxury resort property. Works will commence once permits are in hand, expected for later in 2022. Golden Sands Resort Limited On 26 February 2021, IHI acquired the remaining 50% of the issued share capital of Golden Sands Resort Lim- ited, owner of the Radisson Golden Sands Resort in Malta. e compa- ny has adopted a new strategy for the future of the hotel, including a me- dium-term plan to unencumber the property and acquire timeshare alloca- tions. An existing management agree- ment with Radisson to operate the ho- tel has been reorganised to terminate by end 2024, or earlier by end 2023 at the Company's discretion. Corinthia Hotel New York CHL has been engaged to operate and manage a Corinthia Hotel in New York once it opens following extensive refurbishment in early 2023. The ho- tel was acquired by the private invest- ment firm Reuben Brothers in 2020 and is in New York's luxurious upper east side. Design work is almost com- pleted. Corinthia Group expects revenue to return to pre-COVID levels by 2024 Corinthia London