African Sun Limited Reports H1 2023 Loss of USD 1.81 Million Amid Economic Challenges: Transitioning to USD for Financial Stability

Published On: October 6, 2023Company: African Sun Limited (ASUN.vx)
What is the current financial standing of African Sun Limited and how are they tackling the economic challenges?
African Sun Limited reported a loss of USD 1.81 million in H1 2023 due to escalated operating costs and decreased value of ZWL. They have transitioned to USD as their functional currency in response to increased use of foreign transactions. Utilizing government stabilization efforts and anticipating continuous recovery of the tourism sector, they expect to increase revenue and stabilize the exchange rate. They also maintain a strong liquidity position with cash and cash equivalents of USD 6.98 million, and currently have no outstanding debt.


  • The international tourism sector is showing signs of recovery, with global international arrivals reaching 80% of pre-pandemic levels in the first quarter of 2023. However, high global inflation and increasing oil prices could obstruct its full recovery.
  • Locally, the Zimbabwean Dollar experienced significant depreciation, losing 88% of its value over the six months to 30 June 2023. Government interventions are showing progress in stabilizing the exchange rate and curbing inflation.
  • The Zimbabwe Stock Exchange’s All Share index saw a significant 779% increase during this period. The Victoria Falls Stock Exchange experienced improved market capitalization due to new listings and migration from the ZSE.
  • Effective 1st January 2023, African Sun Limited transitioned to USD from ZWL as its functional currency due to a consistent increase in foreign transactions.
  • For H1 2023, African Sun Limited reported a loss of USD 1.81 million, mainly attributed to escalated costs due to economic challenges and depreciation of the ZWL.
  • While total revenue increased by 2% to USD 22.36 million, operating expenses rose by 36% to USD 13.91 million due to inflationary pressures and higher volumes.
  • The Group’s EBITDA for the period was USD 2.48 million. The loss was mainly due to discontinued operations such as the closure of Kingdom at Victoria Falls Hotel.
  • ASL maintains a strong liquidity position with cash and cash equivalents totalling USD 6.98 million and no outstanding debt.
  • No interim dividend was declared due to the recorded losses and ongoing capital expenditure on hotel refurbishments.
  • For the future, ASL expects the recovery of international arrivals to persist, increased local business, a boost in the residential properties market, and significant hotel refurbishments.
  • Lastly, changes in the directorate were announced with the retirement of Dr. Emmanuel Fundira and the appointment of a new CFO, Mr. Brien Chiota.

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About African Sun Limited (ASUN.vx)

African Sun Limited is a hospitality management company that is involved in the running of hotels, resorts, casinos and timeshare operations in Zimbabwe and South Africa. It operates through four divisions; Hotels Under Management, Hotels Under Franchise, Owner-managed Hotels and the Victoria Falls Hotel Partnership. Established in 1968 as Zimbabwe Sun Limited, the company has grown in stature to include Legacy Hospitality Management Services Limited, which manages five hotels and the InterContinental Hotels Group. Prestigious hotel brands in African Sun Limited’s expansive portfolio include The Victoria Falls Hotel, Holiday Inn, Great Zimbabwe Hotel and The Caribbea Bay Resort. African Sun Limited is a constituent of the Zimbabwe Industrial Index.

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