Covid-19 infects ASL
TINASHE MAKICHI
African Sun Limited (ASL) plunged into a ZWL$1.5bn loss in the 12 months to December 31, 2020 from a ZWL$839m profit reported in prior year as Zimbabwe’s largest hotel and leisure group took a battering from the effects of the Covid-19 pandemic.
ASL halted operations to help curb the spread of the pandemic last year.
Revenues for ASL dropped 55% to ZWL$1.84bn from during the reviewed period from ZWL$4.10bn reported in 2019 owing to low occupancy of 23%, which represented 25 percentage points decline from 48% recorded in 2019.
ASL operates more than 10 hotels including Monomotapa Hotel in the capital, Caribbean Bay Resort in Kariba, the Kingdom Hotel, Elephant Hills, Victoria Falls, in the resort town of Victoria Falls, Great Zimbabwe Hotel in Masvingo, Holiday Inn in Harare, Bulawayo and Mutare, Troutbeck Resort in Nyanga and Hwange Safari Lodge.
Room nights sold for ASL went down by more than half to 137,162 from 288,224 reported in the previous year.
“Covid-19 represents the most significant challenge that our industry has ever faced. At the onset of Covid-19 induced lockdowns, we moved swiftly to right-size our business in response to the precipitous decline in revenue by rebasing our cost structure, strengthening our balance sheet and lowering capital spending,” ASL board chairman, Alex Makamure said.
He added: “Notwithstanding management’s cost containment initiatives, the 2020 results reflect the significant reduction of economic and social activity due to the Covid-19 induced lockdowns as well as the temporary suspension of operations at all our 11 hotels and two casinos at some point during the year.”
ASL’s earnings before interest taxation depreciation and amortisation declined to ZWL$5.42m from ZWL$1.74bn delivered in 2019.
Total assets for the group stood at ZWL$3.5bn in the reviewed period from ZWL$4.7bn in prior year.
Makamure was optimistic that the accelerated Covid-19 vaccination programmes would lead to further relaxing of restrictions and unlocking leisure and business travel.
He said there were prospects of a rebound this year on the back of the current rollout of the Covid-19 vaccines and attaining the required herd immunity.
ASL made an offer to the shareholders of Dawn Properties Limited to acquire the entire ordinary shares issued in the real estate firm in exchange for shares in ASL.
Makamure said ASL had acquired 91.17% of the ordinary shares of Dawn Properties Limited by January 20, 2021 and was going through pertinent legal processes to acquire the remaining 8.83%. He said the group was in the process of integrating the business to achieve the anticipated synergies.
The group also terminated a hotel management deal it entered into with a South African group, Legacy Hospitality Management Services to manage five of its local hotels namely Elephant Hills, Monomotapa, Troutbeck Resorts, the Kingdom and Hwange Safari Lodge.
Makamure said the deal was still going through legal processes.
The group, however, has since fully integrated and taken over the management of the hotels previously managed by Legacy.
