• Recovery indicators are showing positive signs amidst revival of domestic travel and return to normalcy in key global source markets
  • For HY21, occupancies at 24% were 2 percentage points ahead of 22% in HY20, but lower than 38% in HY19
  • Revenue grew by 20% to ZW$1.15 billion

HARARE – Domestic travel, which is already showing signs of recuperating amidst an increase in vaccination rates, will continue to drive recovery for African Sun Limited, a hospitality management company involved in the running of hotels, resorts, casinos and timeshare operations in Zimbabwe and South Africa.

The Group highlighted this in a recently published half-year financial statement ending 30 June 2021.

The country’s hospitality industry at large witnessed a slowdown in occupancies and revenue performances following the outbreak of COVID-19 which forced global nations to enforce travel restrictions in line with the World Health Organisation (WHO)’s protocols.

In Zimbabwe, hospitality companies reported cancellation and postponement of bookings following the announcement of tighter lockdown restrictions in the first quarter of 2020, resulting in low business volumes extending for a considerable period of time.

The measures and the outcome are all legitimate. For the half-year ended 30 June 2021, Afsun reported occupancy of 24%, a 2-percentage point improvement from the 22% achieved in the 2020 comparable period, but lower than the 38% that was achieved in 2019 (pre-pandemic period).

With the revival of domestic travel and the partial return to normalcy in the Group’s key source markets, namely the United Kingdom and the United States of America, recovery indicators are showing positive signs.

“We are cautiously optimistic that the accelerated vaccination programmes around the world and the likely easing of restrictions for vaccinated travelers will contribute to the gradual normalization of travel”, the Group’s chairperson Alex Makamure said.

“In the short-term, domestic travel will continue to drive our recovery.”

On the Real Estate front, he added that demand for residential stands at Marlborough Sunset Views (“MSV”) is strong, and are anticipate that sales will improve over the remainder of the year and unlock the much-needed liquidity for the business.

“While we do not expect a quick return to normalised trading levels, we are optimistic that the various cost saving initiatives that were implemented and a dedicated focus on improving the customer experience, the Group will continue to improve its profitability and rebuild its cash reserves”, Makamure said.

During the half-year period under review, the Group saw a 20% increase in inflation-adjusted revenue to ZW$1.15 billion compared to ZW$0.954 billion recorded in the same period last year driven by the marginal growth in occupancy and a firm Average Daily Rate (“ADR”).

“Included in the current year revenue is ZW$ 84 million (7%) attributable to the recently acquired subsidiary Dawn”, said Makamure.

The Group recorded inflation-adjusted earnings before interest, tax, depreciation and amortisation (“EBITDA”) of ZW$6,6 billion mainly arising from the bargain purchase of ZW$6,45 billion from the acquisition of 91,17% of Dawn in January 2021.

This was largely a result of inflation-driven fair value adjustments on Dawn’s investment properties by the time of acquisition, Makamure highlighted.

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