Valamar Riviera protects employment and expects to reach 30% of last year's revenue

Valamar Riviera protects employment and expects to reach 30% of last year's revenue

Published 24. September 2020.

At the General Assembly of Valamar Riviera shareholders were presented with annual results of 2019, a year in which Valamar achieved double-digit revenue growth to HRK 2.22 billion and 11% growth in operating profit.

In addition to record business results, 2019 also marked the end of a five-year development cycle in which Valamar on average grew operating profit at a rate of 22% and continued to invest sustainably and responsibly in employees, products and destinations as a strategic base for creating new value for stakeholders in the future. In 2019, Valamar invested HRK 955 million in portfolio repositioning, expanded its partnership with pension funds via a capital increase in Imperial Riviera and extended its portfolio to properties on Hvar island. In order to strengthen the group’s financial position, HRK 363 million of realized profit was allocated to retained profit and dividend payout was deferred until further notice.

Valamar actively managed the crisis during 2020 to achieve long-term business sustainability with the support of key stakeholders. The "Pause, Restart" program ensured job protection facilitated by government measures and supported by social partners. By adjusting business operations and with the support of shareholders, banks and other investors, Valamar has secured liquidity to weather the crisis over the next three years. The "Pause, Restart" Program will continue with the aim of protecting employment until the start of next season and the interim period will be used to intensify preparations for future development projects, digitalization and transformation for the next period of growth.   

 In response to the crisis caused by the coronavirus pandemic Valamar postponed HRK 125 million worth investments in 2020, the completion of which is mainly planned for the 2021 season. Due to the uncertainty of future business operations, Valamar delayed the construction of Valamar Pinea Collection Resort in Poreč and postponed other investment projects for 12 to 24 months.

Valamar Riviera expects to generate about 30% of revenues in 2020 compared to 2019 and a positive level of operating profit. The summer tourism season had a good start, but travel warnings issued by several countries during August restricted travel to Croatia which caused a major drop in arrivals in late August and the post-season. Valamar expects that the tourism sector will continue to be affected by the crisis in 2021, while business normalization is expected in 2022 and 2023.

Despite challenging circumstances, Croatia has reaffirmed itself as a stable and desirable tourist destination and has the opportunity to quickly restore tourism activities next year even though business will still be affected by the crisis. Valamar has thus far invested HRK 6 billion in tourism. In the following period Valamar will be focused on maintaining liquidity, protecting employment, adjusting to conditions caused by the crisis and preparing projects for future growth and development.