IHG scraps dividend again
IHG (Intercontinental Hotels Group) (LON:IHG) has swung to a loss in an unsurprisingly challenging year for the hospitality company.
The group’s total revenue was $2.39bn, a fall of 48% compared to a year before. IHG posted an operating loss of $153m, having made a $630m profit in 2019.
In addition, IHG announced a pre-tax loss of $280m, compared to a $542m profit a year ago.
While global revenues per available room were down 53%.
The company scrapped its dividend for the year having done the same for the final dividend of 2019 and the interim dividend for 2020. The hospitality firm will consider reinstating its dividend “once visibility of the pace and scale of market recovery has improved”.
Following the results announcement, IHG’s share price shot up by 3.16% to 5,480p per share. The company’s shares began the year at 4,669p, while in March 2020, when lockdowns came into effect, they dropped as low as 2,385p.
Keith Barr, chief executive at IHG, commented on the unique challenge posed to IHG by the pandemic.
“2020 was clearly the most challenging year in our history, with Covid-19 heavily impacting demand across our industry. 2021 has begun with many of these challenges still in place, with more meaningful progress towards recovery for the industry unlikely until later in the year and dependent on global vaccine rollouts, lifting of restrictions and an acceleration in economic activity,” said Barr.
“The shape of recovery remains varied globally, but we’ve continued to outperform the industry in key markets thanks to the strength of our teams, business model and segments in which we compete. This includes our industry-leading position in upper midscale, where demand remains stronger.”
IHG Hotels and Resorts is a global hospitality company, with nearly 6,000 open hotels in more than 100 countries, and a further 1,800 due to open over the next five years.