By Anthony O. Goriainoff
InterContinental Hotels Group (IHG) is set to release its first-half results, providing insights into the company’s performance. Here are the key details to watch out for:
Net Profit Forecast
According to UBS analyst Jarrod Castle, the net profit consensus for IHG stands at $292 million. This marks an improvement from the net profit of $216 million reported in the same period last year.
Revenue Forecast
Analysts expect IHG to report revenue of $2.1 billion for the first half. However, this falls slightly short of the revenue consensus of $2.2 billion. In comparison, IHG recorded revenue of $1.79 billion in the first half of 2022.
Underlying Earnings Forecast
Jefferies analysts state that the consensus for underlying earnings before interest and taxes (EBIT) stands at $470 million for the period. This figure excludes exceptional and one-off items. Jefferies’ estimate aligns closely with this consensus, coming in at $466 million.
Key Factors to Monitor
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Net Unit Growth (NUG): Despite supply challenges in the U.S., Jefferies suggests that the risk to IHG’s NUG in 2023 is minimal. The NUG consensus for IHG indicates growth exceeding 4.1%, consistent with Jefferies’ estimates. Moreover, analysts project IHG’s NUG for 2023 to be more resilient than that of competitor Hilton due to IHG’s onboarding of Iberostar. This addition is not expected to be affected by construction and lending conditions, and IHG also benefits from lower U.S. exposure (36% of its pipeline) compared to Hilton (42%).
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Revenue per Available Room (RevPAR): RevPAR, a crucial industry metric, is anticipated to show growth of over 15.6% year-on-year in the second quarter. Jefferies’ estimates align closely with this figure, projecting growth slightly above 15.5%. Jefferies believes that the momentum seen in the Americas and China during the first quarter has continued into the second quarter, while the Europe, Middle East, Africa, and Asia (EMEAA) region has displayed improvement.
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Strategy: As these results mark the debut under new CEO Elie Maalouf, analysts expect an update on IHG’s strategy to be provided.
