We have extracted the financial summary from the full year abridged report of African Sun Limited listed on the Zimbabwe Stock Exchange under the share code ASUN.zw. African Sun is a hospitality management company that is involved in the running of hotels, resorts, casinos and timeshare operations in Zimbabwe and South Africa.
The following is an excerpt from the FY2018 Abridged Report:
Group revenue for the year ended 31 December 2018 was US$68.50 million; a 32% growth from US$51.82 million reported last year. The growth was spurred by a 7-percentage points (13%) increase in occupancy from 52% last year to 59%. The revenue growth was also augmented by 17% growth in average daily rate (“ADR”) from US$93 recorded last year to US$109 as the hotels continued to align domestic rates to the implied exchange rate between US$ and RTGS dollar. Occupancy growth was driven by a strong performance from all our source markets with room nights sold for domestic, international and regional increasing by 12%, 14% and 7% respectively. The improvement in ADR and growth in occupancy spurred a 33% growth in rooms revenue per available room (“RevPAR”) from US$48 recorded last year to close at US$64. Total RevPAR also increased by 34% from US$86 last year to US$115 in 2018 responding to the 32% growth in revenue.
The Group posted EBITDA of US$17.13 million. This was 78% above last year in response to the growth in revenue and continued cost management. Net financing costs for the year amounted to US$0.66 million, a 37% decrease from US$1.05 million reported last year due to loan repayments and lower average borrowing rates.
Profit before income tax for the year from operations was at US$13.60 million; a 132% growth from US$5.86 million reported in the prior year driven by the strong revenue performance and cost management. Profit for the year was a 110% growth from last year to US$10.14 million.
Occupancies for the first two months of 2019 were weak compared to same period last year as January was affected by violent strikes and demonstrations. This resulted in cancellations of bookings, mainly from corporate customers and deferrals without concrete dates. Going forward, we anticipate the business to improve supported by the positive changes and sentiments brought about by the Economic Stabilisation Programme (“ESP”), and the recently announced monetary policy statement. In addition, the Group has embarked on a refurbishment plan to ensure that we continue to offer value to our guests and improve our yields. With regards to capacity/rooms, the Group is completing two campsites at Great Zimbabwe, and Caribbea Bay Hotel with a combined capacity of 75 rooms accommodating a maximum of 150 people. These will further enhance tour series offering and the capacity to earn foreign currency.
The Victoria Falls area will continue to benefit from the international traffic that is expected to grow by between 2 and 3% in line with global tourism trends. This will go a long way to augment the local market that we expect to shrink in response to the austerity measures at a national level.