Why Did International Equities’ Revenue Plunge 55% in Q2 2025?
International Equities Corporation Ltd has revealed a significant revenue drop and net loss for Q2 2025, citing economic slowdown and weak tourism as key challenges. The company signals cautious optimism for the hospitality sector despite ongoing cost pressures.
- Revenue down 55.6% to A$2.46 million in Q2 2025
- Net loss of A$730,000 compared to prior profit
- Hotel division posts after-tax loss amid weak tourism
- Property sales and leasing remain stable with positive commissions
- Available funding covers approximately 2.6 quarters of operations
Economic Slowdown Hits Revenue Hard
International Equities Corporation Ltd (IEQ) has reported a steep decline in revenues for the quarter ended 30 June 2025, with total income falling 55.6% to A$2.46 million compared to the same period last year. The company attributed this downturn primarily to a slowing economy, rising operating costs, and subdued tourism activity, which continues to weigh heavily on its hospitality assets.
Hospitality Division Struggles Amid Weak Tourism
The hotel segment, encompassing properties like Seasons Heritage Melbourne and Seasons Botanic Gardens, recorded an after-tax loss of A$95,000 on revenues of A$279,000. Management highlighted ongoing cost of living pressures and increased state taxes as dampening factors for economic activity and hotel occupancy. Despite this, the company remains cautiously optimistic about improved room rates during the upcoming summer months, driven by anticipated increases in tourist and sporting event activity.
Property Sales and Leasing Provide Stability
While the hotel division faced challenges, the property sales and leasing business showed resilience. Revenues of A$313,000 generated a profit after tax of A$171,000, supported by commissions on long-term leases. The company plans to continue actively listing new properties for sale or lease, maintaining a stable outlook for this segment in the year ahead.
Cash Flow and Funding Position
IEQ’s cash flow from operations was negative at A$1.32 million for the quarter, reflecting the tough trading environment. However, the company ended the period with A$1.28 million in cash and an additional A$3.5 million in unused financing facilities, providing a total available funding buffer of approximately A$3.45 million. This equates to an estimated 2.6 quarters of funding available at current operating cash flow levels, offering some runway to navigate ongoing headwinds.
Strategic Outlook and Related Party Transactions
IEQ indicated it will hold off selling its apartment stock amid lease considerations and plans to further develop its presence in hospitality and tourism sectors once market conditions improve. The company also disclosed related party transactions with Renaissance Assets Pty Ltd, including loan facilities and management fees, all conducted on normal commercial terms. No dividends were declared for the quarter, reflecting the company’s focus on preserving cash amid uncertainty.
Bottom Line?
As International Equities navigates a challenging economic landscape, its ability to stabilize hospitality revenues and manage costs will be critical to restoring profitability.
Questions in the middle?
- Will tourism recovery accelerate enough to boost hotel occupancy and revenues?
- How will rising interest rates and inflation impact IEQ’s cost structure going forward?
- What is the timeline for resuming property development activities amid current market conditions?
