• Tue. Jul 16th, 2024

African Sun, financiers discuss standby financing facilities

ByETimes

Oct 6, 2023

By ETimes

HARARE – Hospitality and tourism group African Sun Limited is in talks with lenders for standby funding to spruce up the image of its hotels amid intense competition in the market.

As business travel has begun to increase and income has followed, a number of well-known hotel companies are once again focusing on sprucing up their hotels by giving them a more domestic feel, making healthier cuisine available and upgrading the technology to include free Wi-Fi.

African Sun spent about US$12 million in refurbishment exercises between 2012 and 2018.

“The group maintains a strong position, with no outstanding debt, and cash and cash equivalents totalling US$6.98 million as of 30 June 2023,” group chairperson Constantine Chikosi, said in a statement accompanying the results for the half year ended 30 June 2023.

“We are in discussions with local financial institutions to establish standby financing facilities for significant hotel refurbishment projects in progress.”

Like any other business, Africa Sun appreciates the measures instituted by fiscal and monetary authorities to tame inflation and stabilise the exchange rate.

“We anticipate a resurgence in conference business as controlled spending resumes post-elections, following significant occupancies from election-related activities after 30 June 2023,” Chikosi said.

African Sun incurred a loss after tax of US$1.81 million in H1 2023 owing to the challenging macroeconomic environment.

“Costs escalated at a faster pace than revenue, exacerbated by losses from discontinued operations.”

The group did not declare a dividend, citing a loss recorded during the period under review and ongoing capital expenditure on hotel refurbishments.

African Sun revenue rose 2% to US$22.36 million compared to the same period last year.

“The growth was driven by higher business volumes, with hotel occupancy increasing by 5 percentage points to 46%,” Chikosi said.

On the real estate front, the group is creating an extra 55 stands in Marlborough Sunset Views in an effort to take advantage of the booming residential real estate market.

By ETimes

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