African Sun optimistic of improved bookings
African Sun Limited’s occupancies rose 13 percentage points to 27 percent in the third quarter to September 2021, backed by the easing of lockdown restrictions. For the nine months, occupancy closed at 25 percent, an increase of 6 percentage points compared to the same period in the prior year.
Tourism is one of the sectors most affected by the Covid-19 pandemic, impacting economies, livelihoods, public services and opportunities on all continents.
However, the local tourism industry received a welcome boost from further easing of lockdown restrictions to “Adjusted Alert Level 2” in August 2021.
“This enabled the group to achieve progressive improvements in occupancy rates, closing the months of August, September and October at 23 percent, 41 percent and 53 percent, respectively,” said the company in a trading update.
Revival of the tourism industry is poised to be ‘much faster’ by removal of all travel restrictions as most of the key source markets have removed the country from red lists.
This comes as South Africa, the regional tourism hub and Zimbabwe had been removed from the United Kingdom’s immigration red list.
It has led to an observable increase in travel activity in key source markets around the world.
“The company’s operations are anticipated to remain steady for the remainder of the year, as bookings improve.”
On the real estate segment, the company said property sales continue to be subdued due to lack of mortgage finance and other factors such as rentals, with the Central Business District (CBD) office sector worst affected.
“However, the retail and industrial property rental segments of the market are showing resilience with steady demand,” said the company.
As for the financials, third quarter inflation adjusted revenue rose 89 percent to $722 millionon occupancy growth and the consolidation of subsidiary Dawn Properties Limited, which contributed 8 percent to the total revenue. In the same vein, hospitality revenue increased by 74 percent to $666 million from the same period last year.
Inflation adjusted revenue for the nine months was up 39 percent at $2,02 billion against $1,463 billion in the comparable period.
Year to date hotel segment revenue closed at $1, 88 billion which was 29 percent above the comparative period. Compared to the same period last year inflation adjusted Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) improved by 152 percent from a loss position of $570,64 million to $303,11 million mainly due to cost containment initiatives and an improving top line.
The group’s liquidity position remained sound, closing third quarter with cash and cash equivalents of $927 million with two undrawn facilities amounting to $324million.
In the medium term, the hotelier “anticipate that the domestic market will continue to drive business recovery in the hospitality segment, while volumes from the foreign market are expected to remain subdued.”
Property segment — sales for residential stands at Marlborough Sunset Views (MSV) will ramp up over the remainder of the year freeing up cash flow, while property sales elsewhere and CBD rentals are expected to remain subdued.- eBusiness Weekly
