June the 1st, 2024 – The giant Croatian tourism and hotel group Valamar Riviera has raised 130 million euros in loans aimed at further investments.
As Poslovni Dnevnik writes, Croatia’s Valamar Riviera has borrowed 130 million euros as part of their investment momentum. It is a club loan with Erste&Steiermärkische and Privredna banka Zagreb, whereby each bank is supporting the company with an enormous 65 million euros.
The interest rate at which the loan was approved hasn’t been publicly announced, but it’s known that the term of use is the end of June 2026, and the final maturity date is the end of September 2036.
The company from Poreč headed by Željko Kukurin announced in a press release on the Zagreb Stock Exchange that the club loan was contracted for “needs to finance the construction of a new resort for year-round tourism of the highest quality, which represents the most significant and largest single investment in Croatian tourism in the Pical zone in Poreč”.
In addition to the island of Rab, the construction of the premium summer resort Pical is one of the pillars of Valamar Riviera’s business development strategy until 2026. It includes investments worth 450 million euros to continue raising the quality of hotels and campsites, internationalisation and investment in socially responsible and sustainable tourism projects.
In the financial part, the strategic goal or Valamar Riviera is to achieve double-digit annual growth in business and value. Operating profit (EBITDA) in 2026 should amount to a huge 150 million euros. That means that an average annual earnings growth of around 11 percent compared to 2022 is expected.
For shareholders, the target is a dividend yield of around four percent, with the caveat that the payment will depend on the realisation of annual business plans and the movement of the share value. Revenue is planned to grow to 500 million euros, of which 50 percent will be generated outside of the main summer tourist season, and two-thirds of the revenue will come from direct sales.
Valamar Riviera ended 2023 with a 14 percent increase in revenue to 372 million euros, and 33.7 million euros in net profit as a result of significant investments in raising quality in the previous period.
The company’s operating profit increased by six percent, to 109 million euros, with the cost of lease and adjustment for previous periods for tourist land reducing the operating profit by 4.7 million euros. Last year, the enterprise realised investments worth 58 million euros.
“Premium hotels and the camping segment recorded some excellent results, especially in northern destinations, while the destination of Dubrovnik is taking a sure step towards full recovery, with a new focus on family tourism,” the annual report stated.
Last year’s profit was redirected to retained earnings, but shareholders were paid a dividend of 0.22 euros per share at the end of April. The company used stocks from 2016, 2019 and 2021 for this, in the total amount of about 27 million euros.
