Berlin - InterContinental’s profit rose 10 percent last year, the largest provider of hotel accommodation said yesterday, but its shares fell after the group said renovation costs would hurt this year’s earnings.
Operating profit before exceptional items and tax climbed to $668 million (R7.2 billion) last year from $605m a year earlier, the UK-based company said yesterday.
The owner of the Holiday Inn and Crowne Plaza brands is benefiting from growing demand for accommodation in the Americas, which account for half of its sales.
However, the firm said renovations at the New York Barclay and Paris Le Grand hotels would reduce operating profit by about $10m this year.
“The underlying outlook remains positive,” analysts at Numis Securities said. However, the company “faces some short-term headwinds given dilution from asset disposals and planned refurbishment”.
InterContinental shares fell as much as 4.9 percent in morning trade in London, the biggest decline in six months.
Revenue from its hotels in the Americas rose 9 percent, and operating profit climbed 13 percent. The group plans to increase its full-year dividend by 9 percent to 70 US cents.
“Although economic conditions in some markets remain uncertain, forward-bookings data is encouraging and we are confident we will deliver another year of growth,” chief executive Richard Solomons said.
Net income fell to $372m from $537m a year earlier. Revenue rose 4 percent to $1.9bn.
It said it would sell the InterContinental Mark Hopkins hotel in San Francisco for about $120m. It has been divesting properties over the past decade as it focuses on operating its hotels. InterContinental operates 4 600 hotels in 100 countries but only owns seven remaining properties. – Bloomberg