The IHI Group: €20 million net profit? Don’t be so sure.
It is a feat for a company to post a €20 million net profit.
When International Hotel Investments (IHI) plc, the holding company of the global hospitality firm Corinthia Group, announced that figure in its FY2025 Investors Report, it seemed like a very impressive result.
The company revealed the news in its external communications, attributing its elevated success and ‘significant boost’ in profit to the successful implementation of its growth strategy. The bulletin highlighted the company’s landmark hotels which had been opened in Rome, New York and Brussels, applauding IHI’s ‘ability to adapt to changing market conditions’ and its status as a ‘leading player in the luxury hotel sector.’
Closer examination, however, raises questions about the figures underpinning IHI’s reported €20 million net profit after tax.
The reality is that IHI’s net profit came in at just over €11 million – barely half the figure they had declared. This discrepancy was not revealed by an external source, but from IHI’s own publicly available FY2025 Investors Report.
The €20 million figure appeared to stem from IHI’s exclusion of €9.5 million in losses attributed to non-controlling assets from their overall profit and loss accounts. Put simply, IHI selected the number which suited them.
The balance sheet reveals further discrepancies. IHI revalued its properties in 2025, reporting that the net change in the fair value of its investment properties increased by over €17 million. But the €17 million figure likely represents a paper gain rather than an indication of its operational success.
The financial misgivings do not end there. On 1st January 2024, the total value of IHI’s investment properties sat at €161 million, rising to €253 million by the end of the calendar year. IHI directly attributed this impressive jump of €94 million to the transfer of its Prague property to a third party.
However, in acknowledging this, IHI has inadvertently undermined its own image. The enterprise has admitted that its growth is not a result of a long-term business strategy or an ability to adapt to the changing global environment, as it had claimed in its external communications. Rather, this figure of €94 million is indicative of short-term thinking intended to inflate the Group’s numbers.
Corinthia Group: Financial Reporting under the Microscope
Considering the above, a closer look at Corinthia’s publicly available financial statements seemed warranted.
Corinthia has recorded consistent losses dating back to at least 2014, reflecting a sustained period of financial underperformance under the stewardship of the Group’s founder, Alfred Pisani. The balance sheet tells a story of volatility, with net losses swinging from one year to the next. Considering that losses rose to €11.3 million in 2023 despite having sat at €2.3 million the previous year, there is no guarantee that 2024’s loss of €1.2 million figure will remain stable.
Such instability doesn’t just suggest operational mismanagement. It raises serious questions relating to transparency.
Corinthia’s stated narrative of success is further undermined by evidence which suggests that the enterprise may be under financial strain. In 2024, the Group’s cash balance fell from €87 million to €71.7 million. Corinthia formally stated that it can continue operating – but with a telling caveat: that liquidity remains “under constant review.” A disclosure of this nature is not typically associated with a company that is fiscally strong.
The board’s own words reinforce a picture of a company that, despite purporting to do well, is struggling. In 2022, the Corinthia board announced a deliberate reduction in staffing, reducing headcount to at least 15% below 2019 levels. Shareholders have also fared little better, as Corinthia has failed to pay out dividends since 2019.
Corinthia and IHI’s balance sheets are difficult to reconcile. What is apparent, however, is that the figures highlighted in the company’s external communications, do not adequately reflect the financial position recorded in the businesses’ own fiscal statements. Investors will undoubtedly take note of the reality of Corinthia’s figures, pointing to rocky waters on the immediate horizon.