Hospitality group, African
Sun Limited, reported earnings growth for the half year to June 30, 2018 as
operating profit surged 672 percent to $3,8 million on good business during
election period.
Revenue rose 29 percent to
$27 million buoyed by increased volumes at its hotels.
Basic earnings per share
increased 1 700 percent to 0,36 cents from 0,02 cents in the comparable prior
year period.
During the period under
review, Zimbabwe
witnessed an increase in foreign arrivals as observers from all over the world
flocked the country to observe the election. The election campaign period was
generally peaceful, and economists have said this should continue boosting
investor confidence across sectors of the economy during the remainder of the
year and going forward.
Domestic and foreign
revenue growth was 26 percent and 32 percent respectively.
Key source markets,
especially Europe, Asia and United
States of America played a critical role in
the growth of arrivals, all on the back of global tourism resurgence.
“There was a remarkable
increase in volumes across the hotels, with city hotels benefiting
significantly from elections, conferencing and corporate related business
whilst Victoria Falls area hotels benefited
from increased foreign arrivals,” said African Sun in a statement accompanying
the group’s financial results.
“This positive trend was
achieved despite the constrained macro-economic environment emanating from
unresolved liquidity and foreign currency shortages.”
Occupancy level increased
10 percent to 55 percent, which helped boost revenue growth. Average daily rate
also increased 9 percent to $97.
African Sun said the
occupancy growth was driven by a strong performance from all the markets, with
room nights sold for domestic, international and regional increasing by 16
percent, 26 percent and 22 percent respectively.
This resulted in revenue
per available room (“RevPAR”) increased by 33 percent to $53 from $40 achieved
in the same period last year.
Finance costs declined by
a notable 33 percent to $0,33 million from $0,49 million due to loan repayments
and lower average borrowing rates. Total assets remained almost flat at $38
million.
In the outlook, African
Sun is upbeat of maintaining the growth trajectory as the sector enters its
peak period- festive season.
“The remaining trading
period falls into the Group’s peak trading season. We expect conferencing and
international market business to drive performance. The Victoria
Falls properties should continue to experience growth in foreign
arrivals,” said African Said.
Bookings for the remainder
of the year are already higher than same period last year while various
infrastructure projects around the country, including upgrading of Robert Gabriel
Mugabe International
Airport , the Beitbridge
to Chirundu road rehabilitation and Beitbridge border post development will
bring business opportunities for the group.
Management will therefore
continue to focus on revenue generation and cost reduction initiatives to
navigate the current challenging business environment, leveraging regional and
international brands and their respective loyalty programmes.
The group declared an
interim dividend of 0,0581 cents a share.
Source: African Sun profit up 672pc (06/09/18)
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