International Equities Posts $1.25M Loss as Tourism Struggles Persist
International Equities Corporation Ltd reported a $1.249 million net loss for FY2025, reflecting ongoing challenges in its tourism segment amid a slowing economy and rising costs. The company’s property development and leasing operations also faced headwinds, leading to a decline in overall revenue and asset backing.
- Net loss of $1.249 million for FY2025, reversing prior year profit
- Revenue down 5.16% to $2.465 million, hit by weak tourism demand
- Property assets impaired by $0.488 million, sales on hold
- Leasing segment remains stable with $0.577 million profit
- Net tangible asset backing per security fell to 3.96 cents
Financial Overview
International Equities Corporation Ltd (IEQ) has released its preliminary final report for the year ended 30 June 2025, revealing a significant turnaround from a modest profit in 2024 to a net loss of $1.249 million. Revenues declined slightly by 5.16% to $2.465 million, largely due to continued softness in the tourism sector, which remains under pressure from a sluggish economic environment and elevated operating costs.
Tourism Sector Challenges
The tourism segment, a key part of IEQ’s portfolio, posted an after-tax loss of $0.413 million compared to a profit of $0.768 million the previous year. Despite the gradual reopening of domestic and international travel, the company’s hotel properties in Melbourne, Seasons Heritage Melbourne and Seasons Botanic Gardens, have not seen a meaningful recovery in room yields. The company expects some improvement in occupancy rates during the upcoming summer season, but a return to profitability is anticipated to be slow and cautious.
Property Development and Leasing
In property development, IEQ recorded an impairment charge of $0.488 million on its apartment assets at Seasons Heritage Melbourne following an independent valuation. The company has decided to hold off on selling these apartments, opting instead to focus on leasing strategies to generate steady rental income. The leasing segment showed resilience, delivering a profit of $0.577 million from commissions on long-term leases, providing a stable revenue stream amid broader market uncertainties.
Balance Sheet and Cash Flow
Net tangible asset backing per security declined to 3.96 cents from 4.93 cents in 2024, reflecting the impact of losses and asset impairments. The company’s cash position weakened, with cash assets falling to $1.276 million. Current liabilities exceeded current assets by $1.168 million at year-end, though the directors remain confident in the company’s ability to continue as a going concern. This confidence is supported by demonstrated refinancing capabilities, potential asset sales, and a stable Melbourne property market.
Outlook and Strategic Focus
Looking ahead, IEQ plans to maintain its focus on the tourism and leasing sectors while postponing further property development until market conditions improve. The company intends to bolster its presence in hospitality and tourism through targeted marketing and advertising efforts. However, the directors acknowledge that economic headwinds and sector confidence remain challenging, signaling a cautious approach to growth and capital deployment in the near term.
Bottom Line?
IEQ’s FY2025 results underscore the ongoing challenges in tourism and property markets, setting a cautious tone for recovery efforts ahead.
Questions in the middle?
- How quickly can tourism demand rebound to restore profitability?
- Will IEQ resume property development projects soon or remain focused on leasing?
- What refinancing or capital raising strategies will the company pursue to strengthen its balance sheet?
