11th Aug 2020 08:43
(Alliance News) - InterContinental Hotels Group PLC on Tuesday said its swung to a loss in the first half of 2020 as revenue plummeted during the Covid-19 pandemic and its associated lockdowns.
IHG reported a pretax loss of USD275 million for the six months ended June 30, swinging from a USD375 million profit a year before, as revenue dropped 45% to USD1.25 billion from USD2.28 billion.
The company explained that its loss was "driven predominantly by materially lower fee revenues, as well as losses in the owned, leased and managed lease estate, coupled with a USD99 million movement in System Fund contribution to a USD52 million deficit and a USD240 million net increase in operating exceptional charges."
Revenue from reportable segments, which excludes System Fund revenue and reimbursement costs, fell 52% to USD488 million, including a 50% drop in reportable segments revenue in the Americas and a 60% drop in Europe, the Middle East, Africa & Asia to USD134 million. Greater China revenue fell 73% to USD74 million.
Revenue per available room was down 52% in the six-month period, and was down 75% in the second quarter as occupancy at comparable hotels dropped to 25%. July comparable revPAR is forecast to be down by around 58% on a year before, and occupancy levels in comparable open hotels improved to approximately 45%. Still, 317 hotels or 5% of its estate was closed at July end.
No interim dividend was declared, after IHG paid 39.9 US cents a year before.
Chief Executive Keith Barr said: "The impact of this crisis on our industry cannot be underestimated, but we are seeing some very early signs of improvement as restrictions ease and traveller confidence returns. Whilst the near-term outlook remains uncertain and the time period for market recovery is unknown, we are well positioned with preferred brands in the largest markets and segments, a leading loyalty platform and one of the most resilient business models in the industry. This gives us confidence in our ability to meet the needs of our guests and owners, and to emerge strongly when markets recover."
Separately, the company announced the retirement of Non-Executive Director Luke Mayhew after nine years on the board, effective December 18.
IHG has appointed Graham Allan, chair of private company Bata Footwear and of Nando's Restaurants, as an independent non-executive director. The appointment is effective from September 1. From 2003 to 2012, Allan was president & CEO of Yum Restaurants International, leading development of global brands KFC, Taco Bell, And Pizza hut in over 120 international markets.
Shares in IHG were up 3.0% at 4,122.00p in London on Tuesday morning.
By Anna Farley; [email protected]
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