African Sun bullish about H2 prospects
Hotel group, African Sun says it anticipates increased volume of international travellers in the second half of the year, typically the company’s peak period, which it believes will boost conference business and drive demand from local tourism.
Group chairman, Lloyd Mhishi, in a statement of financials for the half year to June 30, 2024, said company revenue at US$25,58 million was 10 percent higher compared to the same period last year.
“The improved performance was driven by firmer Average Daily Rates (ADR) at US$112, an increase of 9 percent from US$103 during the comparable period,” he said.
Mr Mhishi said hotel occupancy performance was also positive, closing the half year at 50 percent, a four-percentage point increase compared to the same period last year.
He said the real estate segment’s contribution increased during the period from 2 percent to 6 percent, generating an incremental revenue of US$1,28 million coming from residential stand sales.
For the period under review, operating expenses excluding depreciation, at US$14,09 million, increased by 1 percent compared to the same period last year despite the inflationary pressures experienced in the first quarter of the year.
“Through constant monitoring of costs and improved procurement processes, the group managed to contain the overheads amid high risk of price distortions after the introduction of the new currency,” said Mr Mhishi.
He said the group’s earnings before interest, tax, depreciation, and amortisation (EBITDA) at US$2,54 million were 2 percent higher than the same period last year, owing to improved topline performance.
Mr Mhishi noted that the group recorded a loss after tax for the period of US$2,17 million, despite improved topline numbers largely due to higher taxes, loss from sale of property of US$0,27 million, discontinued operations loss of US$0,35 million, and non-recurring costs of US$0,60 million.
“The increase in income tax paid was in line with the additional profit while deferred tax expenses were above the comparable period,” he said.
He added that the group maintained its strong liquidity position, with a cash and cash equivalents balance of US$10,56 million at the end of the period under review, generating US$2,37 million from operations during the period, a significant recovery from the US$1,13 million utilised in the comparable period.
“Furthermore, the group remains debt-free,” said Mr Mhishi.
In terms of portfolio transformation, on hotel refurbishments, Mr Mhishi said the group’s targeted refurbishments progressed well during the period under review, with the completion of the Hwange Safari Lodge public areas and a soft refurbishment on the Executive and Presidential Suites at the Monomotapa Hotel ahead of the SADC summit that was held in August.
“This strategic capital allocation is aimed at positioning the group to grow market share while delivering an upliftment in the hospitality experience for our guests.
“To expedite the refurbishment of several key hotels in our portfolio, the Board resolved to complement capital-raising initiatives by selling selected assets that are considered not core to the group’s future positioning,” said Mr Mhishi.
He noted that the Beitbridge Express Hotel and Great Zimbabwe Hotel were earmarked for sale, with an Agreement of Sale executed subsequent to the reporting date, and the transaction is expected to be completed before the end of the year.
-herald
