African Sun bounces back with $4,8mln profit

African Sun bounces back with $4,8mln profit

HARARE, March 29 (The Source) – African Sun Limited on Wednesday reported a $4,81 million profit, bouncing back from a loss of $8,56 million in the prior year despite a 12 percent decline in revenue to $43,6 million in the full-year to December 2016.

Hotel room occupancy dropped from 48 percent in 2015 to 44 percent last year but is expected to rise this year after the expansion of the Victoria Falls International Airport which tourism players say could increase arrivals into the resort town by 80,000 annually.

In Victoria Falls, AfSun operates Elephant Hills, Kingdom Hotel and controls 50 percent of Victoria Falls Hotel with Meikles holding the other 50 percent. The group also operates Holiday Inn, Hwange Safari Lodge, Monomotapa, Great Zimbabwe Hotel, Amber Hotel and Troutbeck resort.  

In 2015, the group contracted Legacy Hotels of South Africa to manage five of its biggest hotels:Elephant Hills, Kingdom Hotels, Monomotapa, Troutbeck and Hwange Safari Lodge.

Operating expenses were 19 percent lower at $27,9 million in the 12 months to December.

Revenue per room (RevPAR) declined from $45 achieved same period the previous year to $41 with the average daily rate (ADR) remaining flat at $93.

Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) dropped one percent to $5,48 million as a result of drop in revenue.

The group recorded $3,03 million in other income due to $28,000 bond note export incentive, $1,93 million profit from the disposal of African Sun Limited’s PCC subsidiary, $28,000 profit on disposal of fixed assets and $23,000 insurance claims.

Chairman Herbert Nkala said the group settled its dispute over ownership of the timeshare units at the Troutbeck (24 units) and Caribbea Bay Resorts (11 units) with Dawn Properties Limited.

“In the settlement, Dawn Properties Limited agreed to pay African Sun Limited the sum of $1 415,135. The net book value of assets was US$1 370 505 and a gain of $0,045 million was realised,” said Nkala in a statement.
Nkala added that AfSun will continue focusing on reducing cost of sales and drive volumes through promotions targeting both domestic and international markets.