Harare – Hospitality Group, African Sun Limited has reported a drop in occupancies for the 5 months period ended 31 May 2019 to 43%, representing a reduction of 10 percentage points compared to 53% recorded in the same period last year impacted by depressed domestic market and problematic Q1.
The Group’s revenue, however, maintained its positive trend amounting to ZWL48.3 million split as 56% and 44% between domestic and foreign respectively.
This represents 131% growth in nominal terms to same period last year.
Addressing shareholders and analysts at the Group’s AGM held in the capital on Thursday, chief executive Edwin Shangwa said the violent protests in mid-January were a major setback to local arrivals resulting in cancellations and postponements of conferences.
“The January protests also had a negative impact on our international and regional arrivals which have a longer lead time and are very sensitive to safety issues,” Mr Shangwa said.
Highlighting the depressed domestic market is a combination of a slowdown in economic activity, spiking inflation, erosion of real income, shortages of foreign currency and fuel and a general uncertainty towards future prospects.
Resultantly, AfSun’s domestic market went down by 11% year-to-date.
Mr Shangwa said the Group has managed to reduce its borrowings during the period under review going down by 31% to ZWL$181k.
Overheads to turnover ratio during the review period came in at 51% compared to 57% recorded in the same period last year.
EBITDA margin was 37% compared to 18% recorded last year, indicating improved profitability.
Gross profit margin was at 77% from 69% recorded in prior year.
On the outlook, Mr Shangwa said the Group has increased investment in foreign markets, taping into new markets like India.
“The Victoria Falls properties will take a bigger portion of the foreign business as we enter our peak season” he said.
The on-going refurbishment efforts and increase in capacity is also earmarked to contribute immensely to the Group’s performances.
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