ASL loss widens despite topline uptick
BUSINESS REPORTER
African Sun Limited (ASL)’s, a publicly traded hospitality group, reported a wider loss of US$2.17m in the six months to June this year, largely as a result of higher taxes, loss from sale of property, discontinued operations loss and non-recurring costs, Business Times can report.
The loss was US$1.81m in the prior comparative period.
The widened loss was incurred despite generating a revenue of US$25.58m in the period under review, a 14% uptick from US$22.36m reported in the prior comparative period.
The improved topline was driven by firmer average daily rates (“ADR”) at US$112, an increase of 9% from US$103 during the comparable period.
“During the period under review, the group performance showed improvements in revenue and operating profit. However, a loss after tax of US$2.17m during six months ended June 30, 2024, from US$1.81m was recorded during the comparative period in 2023, largely driven by non-recurring costs. The group recorded a loss after tax for the period of US$2.17m, despite improved topline largely due to higher taxes, loss from sale of property of US$0.27m, discontinued operations loss of US$0.35m and non-recurring costs of US$0.60m,” ASL board chairman, Lloyd Mhishi, said.
Hotel occupancy performance was also positive, closing the half year at 50%, a four percentage points increase compared to the SPLY.
Real Estate’s contribution increased during the period to 6% from 2%, generating an incremental revenue of US$1.28m coming from residential stand sales while the group’s operating expenses, excluding depreciation, at US$14.09m, increased by 1% compared to SPLY despite the inflationary pressures experienced in the first quarter of the year.
Mhishi said ASL managed to contain the overheads amid high risk of price distortions after the introduction of the new currency through constant monitoring of costs and improved procurement processes.
Earnings before interest, tax, depreciation, and amortization (EBITDA) at US$2.54m, was 2% higher than SPLY, owing to improved topline numbers performance.
The group maintained a strong liquidity position, with a cash and cash equivalents balance of US$10.56m at the end of the period under review, generating US$2.37m from operations during the period, a significant recovery from the US$1.13m utilised in the comparable period.
He said targeted refurbishments progressed well during the period under review, with the completion of the Hwange Safari Lodge public areas and a soft refurbishment on the executive and presidential suites at the Monomotapa Hotel ahead of the SADC summit that was held in August.
“This strategic capital allocation is aimed at positioning the group to grow market share while delivering an upliftment in hospitality experience for our guests. To expedite the refurbishment of several key hotels in our portfolio, the board resolved to complement capital raising initiatives by selling selected assets that are considered not core to the group’s future positioning.
