InterContinental Hotels Q3 profit down 25 pct

LONDON (AP) — InterContinental Hotels Group PLC, operator of Holiday Inn hotels, on Tuesday reported a 25 percent drop in third-quarter net profit as it continued to cut its rates due to intense competition and weak demand.

InterContinental, the world's largest hotel company by room count, posted a net profit of $68 million, compared to $91 million a year earlier. Revenue fell 19 percent to $401 million.

The market took heart from pretax, pre-exceptional profits of $111 million, about a third higher than analysts' consensus but below last year's $125 million.

Revenue was down 19 percent in the Americas to $206 million; revenue in Europea/Middle East/Africa fell 25 percent and in Asia/Pacific it was down 13 percent.

The result followed a net loss of $56 million in the second quarter, when the company wrote off $162 million from the value of its assets.

Simon French, analyst at Panmure Gordon&Co., said current trading was encouraging, with revenue per available room down 13.5 percent from a year ago compared to a drop of 15.2 percent in the third quarter.

For the first three quarters, InterContinental's net profit fell to $38 million compared to $254 million a year earlier. Revenue slid to $1.12 billion from$1.47 billion.

InterContinental shares were up 4.4 percent at 861 pence on the London Stock Exchange.

"The trading environment remains challenging," said Chief Executive Andrew Coslett. "We see signs of occupancy stabilizing, but rate is still under considerable pressure across the board."

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