African Sun in talks with potential investors
Hospitality group African Sun Limited intends to continue pursuing expansion opportunities in appropriate locations with the right timing and funding structures and the Victoria Falls Stock Exchange listed group is currently in discussions with leading financial institutions to secure funds to bolster its healthy cash reserves for accelerated hotel refurbishment projects.
In its short-form financial announcement for the year ended December 31, 2023, the group highlighted that during the year under review, it posted an operating profit of US$3,74 million.
However, it recorded a marginal profit after tax from continuing operations of US$0,52 million.
The group revenue was US$54,73 million, up 30 percent against the comparable period.
The improved performance was driven by firmer Average Daily Rates (ADR) which closed 2023 at US$110, an increase of 39 percent against US$79 achieved during the comparable period as a result of changes in customer mix.
Hotel occupancies increased to 52 percent, representing six percentage points above 2022.
Revenue per available room for accommodation increased by 58 percent to US$57, up from US$36 in the comparative period.
The group’s operating expenses, excluding depreciation, increased by 43 percent to US$27,63 million compared to US$19,29 million in 2022 driven largely by exchange rate volatility and inflationary pressures.
It noted that it will continue to monitor costs and implement various cost-saving initiatives.
Profitability earnings before interest, tax, depreciation and amortisation was US$9,45 million, down from US$17,86 million in 2022, and the loss for the period was US$0,36 million.
“The discontinued operations loss of USD$0,89 million largely comprises property and equipment impairments post the closure of The Kingdom Hotel in Victoria Falls and the Makasa Sun Casino.
“This follows the mutual termination of the lease at The Kingdom at Victoria Falls Hotel, due to an untenable lease tenure.”
However, it said it will continue looking for suitable expansion opportunities in appropriate locations and with the right timing and funding structures.
The African Sun Limited-owned Kingdom Hotel exited the premises in 2023 citing the lease tenure disagreement with the property owner — First Capital Bank (FCB), the new owners of the Makasa Casino building.
The hotel has 294 rooms and the Great Enclosure conference facility, making it the biggest in Victoria Falls.
With regards to liquidity, the group operated free of debt and had cash and cash equivalents of US$10,87 million as at December 31, 2023.
“The group is currently in discussions with leading financial institutions to secure funding to complement its healthy cash balances for deployment in carrying out accelerated material hotel refurbishment projects.”
During the period under review, refurbishment of the 46 rooms at Hwange Safari Lodge was completed and the refurbishment of the public areas is in progress.
The refurbishment of the public areas at Troutbeck and the Great Zimbabwe Conference Centre was also completed during the period under review.-chronicle
