HOSPITALITY group, Africa Sun Limited (AfriSun) says its losses widened to US$2,16 million in the half year ended June 30, 2024, from US$1,8 million previously, driven by non-recurring costs and discontinued operations.
“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 the 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,” AfriSun chairman, Lloyd Mhishi said in a statement accompanying the group’s results.
“The increase in income tax paid was in line with the additional profit while deferred tax expenses were above the comparable period,” Mhishi said.
The group maintained its strong liquidity position, with a cash and cash equivalent 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.”
The group had US$1,84 to every dollar of short-term debt.
“At US$25,58 million, the group’s revenue was up by 14% compared to the Same Period Last Year (SPLY),” Mhishi said.
“The improved performance was driven by firmer Average Daily Rates (ADR) at USD112, an increase of 9% from US$ 103 during the comparable period,” Mhishi said.
“Hotel occupancy performance was also positive, closing the half year at 50%, a four percentage points increase compared to the SPLY.
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“Real estate’s contribution increased during the period from 2% to 6%, generating incremental revenue of US$1,28 million coming from residential stand sales.”
Operating expenses, excluding depreciation, were recorded at US$14,09 million, which were up 1% over 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,” the AfriSun chairman said.
During the period, the group completed the refurbishment of the Hwange Safari Lodge public areas and a soft refurbishment of the executive and presidential suites at the Monomotapa Hotel before the Sadc summit held in August.
The hotel’s strategic location in the capital positioned the group to grow its market share while delivering improved hospitality experience for 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,” Mhishi said.
“The Beitbridge Express Hotel and Great Zimbabwe Hotel were earmarked for sale, with an agreement of sale executed after the reporting date.
“The transaction is expected to be completed before the end of the year.”
Last month, the chain announced the sale of Beitbridge Express Hotel and Great Zimbabwe Hotel to the TD Hotels & Leisure (Private) Limited for US$6,94 million.
Over the reporting period, AfriSun’s total assets were down to US$140,84 million from US$142,33 million at the end of last year as a result of accumulated depreciation and impairment of US$25,33 million on the group’s property and equipment.
“Going into the second half of the year, typically our peak period, we anticipate an increase in the volume of international travelers, a boost in conference business, and increased demand from local tourism,” Mhishi said.
“However, the macroeconomic environment is likely to remain tough, as the effect of the low rainfall is anticipated to be greater than previously anticipated, as evidenced by the slowdown in economic growth to 2% as predicted by the IMF.”
He said ongoing global inflation, supply chain disruptions, and rising commodity prices could result in higher transportation and accommodation costs, potentially constraining spending patterns and demand throughout the forecast period.
“Additionally, geopolitical tensions and trade uncertainties are expected to continue for the foreseeable future,” Mhishi added.
“The group remains vigilant and agile in addressing these challenges to ensure we create sustainable value for all our stakeholders.”
