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Valamar Riviera Secures €130 Million for Major Investments
2024-06-04 source ownThe prominent Croatian tourism and hotel group, Valamar Riviera, has successfully raised €130 million in loans to fund its ambitious investment plans. According to Poslovni Dnevnik, Valamar Riviera secured this substantial sum through a club loan arrangement with Erste&Steiermärkische and Privredna banka Zagreb, each contributing €65 million.
Loan Details and Future Plans
While the specific interest rate remains undisclosed, the loan term is set to end in June 2026, with final maturity slated for September 2036. Valamar Riviera, headquartered in Poreč and led by CEO Željko Kukurin, announced via the Zagreb Stock Exchange that the funds will finance the construction of a high-quality, year-round resort in the Pical zone of Poreč. This project represents the largest single investment in Croatian tourism to date.
Strategic Investments and Growth Goals
In addition to the development on the island of Rab, the Pical resort construction is a cornerstone of Valamar Riviera’s business strategy through 2026. The company plans to invest €450 million to enhance the quality of hotels and campsites, expand internationally, and focus on socially responsible and sustainable tourism projects.
Financially, Valamar Riviera aims for double-digit annual growth in business value, targeting an operating profit (EBITDA) of €150 million by 2026. This goal represents an average annual earnings growth of approximately 11% compared to 2022. For shareholders, the company projects a dividend yield of around 4%, contingent on the realization of annual business plans and share value movements. Revenue is expected to reach €500 million, with 50% generated outside the main summer tourist season and two-thirds from direct sales.
2023 Performance Highlights
Valamar Riviera concluded 2023 with a 14% increase in revenue, reaching €372 million, and a net profit of €33.7 million, thanks to significant investments in quality improvements. The company’s operating profit rose by 6% to €109 million, despite a €4.7 million reduction due to lease costs and adjustments for previous tourist land use. In 2023, the company invested €58 million, achieving notable success in premium hotels and camping segments, particularly in northern destinations. Dubrovnik also made significant strides toward full recovery with a new emphasis on family tourism.
Shareholder Returns
Last year's profits were retained, but shareholders received a dividend of €0.22 per share in April, funded from stocks accumulated in 2016, 2019, and 2021, totaling approximately €27 million.
Valamar Riviera’s strategic investments and robust financial performance underscore its commitment to enhancing Croatian tourism and delivering long-term value to its shareholders.
