InterGroup Corporation Reports Increased Net Loss and Revenue Changes for December 2024 Quarter

The InterGroup Corporation reported a net loss of $3.7 million for the three months ended December 31, 2024, compared to a net loss of $2.2 million for the same period in 2023. The company's total revenues for the quarter were $9.97 million, a slight decrease from $10.23 million in the prior year. The loss from hotel operations increased to $2.84 million, primarily due to rising mortgage interest expenses. The hotel segment's operating income before interest, depreciation, and amortization was $910,000, down from $820,000 in the previous year, reflecting a decrease in room and food and beverage revenues.

For the six months ended December 31, 2024, InterGroup's net loss was $4.55 million, compared to a loss of $3.77 million in the same period of 2023. Total revenues for this period increased to $21.79 million from $21.32 million, driven by a rise in room revenues attributed to renovations completed at the hotel. The hotel segment reported an operating income of $3.94 million before interest, depreciation, and amortization, up from $2.63 million in the prior year. However, the overall loss was impacted by increased mortgage interest expenses.

In terms of strategic developments, InterGroup continues to focus on its real estate operations, which generated $4.48 million in revenue for the quarter, up from $4.10 million in the previous year. This increase was attributed to reduced vacancy rates at a Missouri property undergoing renovations. The company has also made capital improvements totaling $899,000 to its real estate portfolio during the six months ended December 31, 2024. The company’s investment in marketable securities, however, resulted in a net loss of $598,000 for the quarter, contrasting with a gain of $1.76 million in the prior year.

Operationally, InterGroup's hotel segment has seen fluctuations in key performance metrics. The average daily room rate decreased by $17, while occupancy increased by 7% year-over-year. The company reported a total of 544 rooms at its Hilton San Francisco Financial District property, which remains its primary asset. The company’s cash and cash equivalents increased to $10.42 million as of December 31, 2024, compared to $4.33 million at the end of June 2024, indicating improved liquidity.

Looking ahead, InterGroup faces challenges related to its debt obligations, particularly a senior mortgage and mezzanine loan totaling approximately $100.29 million that matured on January 1, 2024. The company entered into forbearance agreements with its lenders to extend the maturity date to January 1, 2025, while actively pursuing refinancing options. The company remains optimistic about successfully refinancing its debt by March 2025, although substantial doubt exists regarding its ability to continue as a going concern if these efforts do not materialize.