AfSun PAT flat despite 19pct revenue growth

HARARE,– African Sun Limited after tax profit for the year ended December 31, 2017 increased a marginal 0.20 percent to $4.82 million from $4.81 million in 2016 despite increased revenue and lower costs.

The group achieved a 19 percent increase in revenue to $51.83 million compared to $43.6 million last year spurred by an 8 percent increase in occupancy levels which ended the year at 52 percent compared to 44 percent during the prior year.

Managing director Edwin Shangwa, briefing analysts, said occupancy growth was achieved across all three market segments with the international market posting the highest growth of 29 percent, domestic 17 percent and regional three percent.

“The 17 percent growth in the domestic market was partly due to the flexible pricing system implemented during the year,” he said.

During the year, average daily rate (ADR) was maintained at $93 and Shangwa said group focus was on driving occupancies, despite a 1 percent growth in the international and regional ADR.

“The rate strategy and growth in occupancy spurred a 17 percent surge in room’s revenue per available room from $41 recorded last year to $48,” he said.

Total RevPar also increased 18 percent to $86 in 2017 from $73 last year responding to the 19 percent growth in revenue.

Earnings before interest, tax , depreciation and amortisation (EBITDA) grew 53 percent to $8.37 million largely on increased turnover and cost management. Net financing costs for the year amounted to $4.82 million from $2.87 million last year.

Shangwa also said the group had restructured its borrowing facilities, obtaining a good mix of both short-term and long term loans.

This year, hotel operations are expected to benefit from key activities that include elections, infrastructure developments and the new government thrust of the open business mantra, he added.

The company declared a dividend of 0.000697 cents per share.

In a trading update for the year to date, Shangwa said revenues are up 29 percent, reflecting economic activities in the market which include build-up to elections.

Occupancy at 45 percent is 8 percent up on prior year while ADR at $92 is up 7 percent same period last year comparable.  RevPar is up 31 percent.

In terms of the phased refurbishment of hotels, Shangwa said the company is in consultation with Great Zimbabwe Hotel owners and plans are advanced to rebuild and refashion the hotel in the medium long term. The project will also include construction of a modern Conference Centre.

The Caribbea Bay Resort has already undergone significant external refurbishments and attention has now moved to the interior with mock up Room concepts and artistic impressions completed. – Source

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