Valamar reached 33% of revenue and succeeded in keeping all employees

Valamar reached 33% of revenue and succeeded in keeping all employees

Published 30. October 2020.

Valamar will achieve more than EUR 13 million in operating profit and positive cash flow despite a net loss and 2020 crisis

According to the third quarter financial report, Valamar Riviera recorded 2.2 million overnights and EUR 89.1 million in revenues, or 33% of last year’s revenues, despite the Covid crisis. Valamar Riviera expects to record a net loss in 2020, but expects to achieve a positive cash flow with operating profit ranging between EUR 13.2 million and EUR 15.2 million.

With the support of key stakeholders, Valamar actively managed the crisis and the summer tourist season after the onset of the pandemic. Dividend payment for 2019 was revoked in March, members of the Supervisory Board waived their regular fees, while management salaries were reduced by up to 30%. Valamar implemented the “Pause, Restart Program” with support of social partners, ensuring continued payouts to all employees waiting for work in the amount of 60% of their regular salary, but not less than HRK 4.250. Croatian Government supported the employment protection program via grant measures. Operating costs were reduced by 59% versus 2019 and investments already underway in 2020 were postponed for 2021. Valamar also secured additional mid-term liquidity through a revised credit arrangement to weather the crisis in the following period.

In addition to implementing cost saving measures and creating sufficient liquidity, Valamar modified its products in order to improve service quality and safety for the 2020 summer season. A total of 24 hotels and resorts and 15 camping resorts opened in eight destinations on the Adriatic coast, employing more than 4.400 workers. End of June and the beginning of July indicated a promising start of the Croatian tourism season but travel restrictions caused a significant drop in volume during the second half of August and in the shoulder season. Despite the adverse impact of the pandemic, Valamar has welcomed nearly 300.000 guests in its hotels and resorts without a single reported case of on-property spread of infection, protected employment and was once again confirmed as the best employer in Croatian tourism.

Initially planned investments for 2020, totaling EUR 106 million, have been partially reallocated for realization over the period of two years. Initiated projects, notably the reconstruction of the Valamar Parentino Hotel in Poreč and the Valamar Meteor Hotel in Makarska, will be completed during coming autumn and winter. All other major investments will be delayed in the following 12 to 24 months, including the construction of the Valamar Pinea Collection Resort in Poreč, the largest single investment in Croatian tourism worth EUR 105 million. In the coming period, Valamar will be focused on digitalization projects, business transformation and preparing projects for future growth and development.

“The crisis has shown us that companies which excelled and invested in good stakeholder relations before the crisis will continue to do so during the crisis. This approach strengthens stakeholder trust and enables faster economic recovery. Valamar has actively managed the crisis in 2020 and positioned itself well to successfully resume growth and development during 2021 and 2022 when business normalization is expected. We wish to thank all stakeholders for their support, especially our employees, shareholders, suppliers, contractors, banks, and the Government who partnered with us in overcoming this demanding business year”, said Željko Kukurin, the CEO at Valamar Riviera.