Ikeja Hotel profit climbs 14% on surge in room rates

Ikeja Hotel Plc reported a 14% rise in full-year net profit in 2025, as a surge in occupancy and higher room rates at its flagship Sheraton Lagos Hotel helped offset rising operating costs and a sharp increase in tax expenses.

The hospitality group posted net income of ₦8.30 billion for the year ended December 31, 2025, up from ₦7.29 billion a year earlier, according to its unaudited results. The performance was driven by a sharp jump in revenue, reflecting resilient demand in Nigeria’s largest commercial hub despite high inflation.

Revenue climbed 38% year-on-year to ₦25.84 billion, from ₦18.75 billion in 2024, signalling a strong rebound in Lagos’ business travel and conference market.

That growth more than absorbed higher expenses. Cost of sales rose 17% to ₦13.11 billion, while administrative expenses jumped 43% to ₦2.57 billion, reflecting higher energy, staffing and maintenance costs. Even so, operating profit increased 19% to ₦9.94 billion.

Profit before tax surged 47% to ₦12.56 billion, underlining the company’s pricing power in a high-inflation environment.

Earnings per share rose to 384 kobo, from 337 kobo in 2024, boosting shareholder returns.

Cash-rich balance sheet cushions pressure

Unlike many Nigerian companies grappling with high borrowing costs, Ikeja Hotel benefited from a strong liquidity position.

Interest income jumped 76% to ₦2.62 billion, supported by higher yields on bank placements. Cash and cash equivalents rose 46% to ₦33.15 billion, giving the group ample buffer against economic volatility.

The main drag on earnings came from taxation. Income tax expense surged 241% to ₦4.25 billion, up from ₦1.25 billion the previous year, after the company exhausted prior-year tax credits.

Ikeja Hotel continues to reinvest in its core assets to maintain its edge against newer international hotel brands entering Nigeria’s commercial capital. The group reported ₦721 million in capital work in progress, largely tied to renovation and upgrade projects at the Sheraton Lagos Hotel.

Total equity rose 26% to ₦38.60 billion, reflecting retained earnings and a strengthening balance sheet.

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Ikeja Hotel operates a portfolio that includes Sheraton Lagos Hotel, Federal Palace Hotel in Lagos, and Capital Hotel in Abuja, properties that cater largely to corporate travellers, conferences and government-related events. Demand in these segments has been uneven as companies and public institutions cut discretionary spending.

Nigeria’s hospitality sector has struggled to fully recover from the combined shock of the COVID-19 pandemic, currency devaluations and the removal of fuel subsidies, which sharply raised operating costs. Hotels, in particular, have been hit by soaring electricity expenses and the high cost of imported food and equipment.