…as it reports ZWL$1.5bln FY2020 loss

Staff writer

Hotelier African Sun reported a ZWL$1.5 billion FY2020 inflation adjusted loss, says it reflects a significant reduction of economic and social activity due to the Covid-19 induced lockdowns as well as the temporary suspension of operations at all its 11 hotels and 2 casinos at some point.

The group recorded its worst occupancies and volumes in April and May.

The net loss of ZWL$1.5 billion in FY2020 compares with a profit of ZWL$839.02 million a year earlier.

Revenue declined 55% to ZWL$1.84 billion from ZWL$4.10 billion in the comparative period. It recorded a low occupancy of 23%, representing a decline of 25 percentage points compared to 48% recorded in 2019. Room nights sold went down by 52% to 137 162 from 288 224 in 2019. The decline in room nights was across all market segments, with those attributable to export and domestic reducing by 82% and 35% respectively.

The fall in revenue and volumes resulted in the group posting an inflation adjusted EBITDA of ZWL$5.42 million compared to ZWL$1.74 billion in 2019. The inflation adjusted loss before tax of ZWL$1.86 billion is largely a result of the monetary loss of ZWL$1.50 billion, which is a result of applying International Accounting Standard (IAS) 29 Financial Reporting in Hyperinflationary Economies.

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Cash generated from operating activities was down 87.40% to ZWL$168.13 million from ZWL$1.33 billion.
Operating expenses fell 27.71% to ZWL$1.57 billion from ZWL$2.18 billion. Finance costs rose eightfold to ZWL$48.6 million from ZWL$5.16 million.

The group remains optimistic that the accelerating Covid-19 vaccination programmes will lead to further relaxing of restrictions and unlocking leisure and business travel.

“While we do not expect that there will be a quick recovery to previous trading levels, we are optimistic that the various cost saving initiatives and the renewed focus on improving the customer experience, the group will recover from the Covid-19 pandemic,” said group chairman Alex Makamure.

Pursuant to the company’s offer to acquire 100% of Dawn Properties Limited, 91.17% of the ordinary shares of DPL had been acquired as of 20 January 2021.

“The company is going through pertinent legal processes to acquire the remaining 8.83%. We are in the process of integrating the business to achieve the anticipated synergies.”

It did not declare a dividend-HARARE

Half year recap: https://etimes.co.zw/2020/09/23/african-sun-occupancies-decline-to-22-in-h1-shelves-revamp-to-preserve-cash/

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