• Tue. Nov 29th, 2022

African Sun YTD occupancies rose to 45%, cautiously optimistic about outlook

ByEconomic Times

Nov 19, 2022

By ETimes

African Sun, which operates a chain of luxury hotels and lodges across the country, said occupancy levels for the nine months ended 30 September 2022 rose to 45% compared to 25% in the same period last year helped by improved business activity.

The travel and tourism sector were among those most badly damaged by the Covid-19 pandemic. Hotels, restaurants, airlines, and travel companies were required to essentially suspend operations for a considerable amount of time.

The industry’s activity has only just started to gradually recover to pre-2020 levels.

African Sun occupancy rate for the year to date, at 45%, is still two percentage points below the 47% recorded in 2019.

For the three months ended 30 September 2022, the hotelier’s occupancy levels stood at 53% representing a 26 percentage points increase from the 27% in the same period last year.

“Domestic business anchored the improved performance, mainly from the Meetings, Incentives Conferences and Events (MICE) as foreign business continues to recover,” said the company in a trading update.

Occupancy for Q3 at 53% is 1% higher than the same period in 2019, compared to pre-covid-19. The overall occupancy rate for city hotels was 59%, compared to 47% for resort hotels, which are still feeling the effects of Covid-19.

“During the quarter under review 15% of the business was foreign business, which is still lower than the average foreign business contribution of 20% pre-Covid 19.”

As of financials, inflation-adjusted revenue for the nine months rose 156% to ZWL$22.1 billion, compared to ZWL$14.8 billion in the comparable period last year.

The group recorded an encouraging inflation-adjusted EBITDA of ZWL$13.5 billion.

“This was on the back of increasing business volumes that spurred the growth of the top line,” it said.

At the end of September 2022, total assets were valued at ZWL$112.4 billion. Regarding liquidity, the group ended the third quarter with ZWL$8.9 billion in cash and cash equivalents.

The company’s typical peak season, which is marked by a rise in leisure and convention activity, occurs in the last quarter of the year.

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“We are cautiously optimistic that we can expect increased business activity for these segments.

“As we look to the future, we remain focused on our strategy to upscale the state of our hotels through our ongoing various refurbishment programmes,” it said.

Following the 30th of September 2022, the group distributed an interim dividend for all of the company’s ordinary shares equal to ZWL0.102118 per share plus an additional USD0.000545 per share – Harare

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