African Sun records $8,3 million loss

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HARARE — Listed hotelier group African Sun posted a loss after tax of $8,3 million in the 15-month period to 31 December 2015 as revenues during the period declined.The low revenue performance was attributed to the broader negative performance within the country’s tourism sector.

“The South African market which contributes significantly to Zimbabwe tourist arrivals has suffered from the depreciation of the South African rand making Zimbabwe an expensive destination,” said chairman Mr Herbert Nkala in a statement accompanying the results.

African Sun shifted its financial year end from September to 31 December to align it with that of its major shareholder — Brainworks Capital. In the previous period, it had reported a $2,2 million loss in the year to 30 September 2014.

For the year just ended, the group’s total revenue stood at $63,1 million.

“On a like for like, revenue decreased by 8 percent as the group experienced noticeable decline in the average monthly revenues during the period under review,” said the company.

Income per available room dropped from $47 to $45, however occupancy levels jumped marginally from 48 percent to 49 percent.

Operating expenses stood at $43,4 million, rising from $33 million in the prior 12-month period.

African Sun currently operates 11 hotels in Zimbabwe. And in October last year, the group appointed Legacy Group of hotels to manage five of its hotels — Elephant Hills, Troutbeck, Hwange Safari Lodge, The Kingdom and Monomotopa Hotel.

At the same time (2015), the group exited their regional operations in Ghana, South Africa, Mauritius and Nigeria.

Management said the regional operations were weighing heavy on the local unit, which was profitable.

During the period under review, the group reduced staff compliment by 20 percent to 1 179, a move they anticipate will yield annual savings of at least $2,7 million.

Finance costs fell by 16 percent to $2,5 million as the group managed to reduce borrowings from $17,3 million to $7, 7 million.

Earnings Before Income Tax Depreciation and Amortisation (EBITDA) amounted to $7 million compared to $8,3 million in the previous 12 month period.

Going forward, the chairman said the group will maintain implementing the new business model as well reducing cost of sales and overheads, as well as driving volume growth.

The board has resolved not to declare a dividend for the year ended. — BH24

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