African Sun records profit despite macroeconomic c...

African Sun records profit despite macroeconomic challenges

Zim Now Writer

African Sun Limited, a Zimbabwean hotel and leisure group, has announced its financial results for the year ended December 31, 2023, showcasing resilience in a difficult economic climate.

While the group experienced a marginal profit after tax from continuing operations of US$0.52 million, management attributed the muted profitability to a “harsh macroeconomic operating environment”.

“Costs escalated at a higher rate than revenues, compounded by material exchange rate losses triggered by the ... rebasing of the Group’s functional currency,” explained African Sun in a statement.

Despite these challenges, the group highlighted positive developments in key performance indicators.

“The Group revenue was US$54.73 million, up 30% against the comparable period,” the statement reads. ASL credits this growth to “firmer Average Daily Rates (ADR)” and a rise in hotel occupancy to 52%, a 6% increase year-on-year.

Looking ahead, African Sun Limited is cautiously optimistic.

“The UNWTO forecasts international tourist arrivals to fully recover to pre-pandemic levels in 2024,” the announcement reads, citing the World Tourism Organisation.

The group, however, acknowledges potential headwinds, including “persisting global inflation and rising oil prices”.

The announcement detailed African Sun’s ongoing commitment to hotel refurbishment projects.

“Our cash deployment strategy mainly focuses on completing targeted hotel refurbishments to enhance guest experience,” the statement reads.

The group highlighted the completion of refurbishments at Hwange Safari Lodge, Troutbeck, and the Great Zimbabwe Conference centre.

African Sun also revealed plans to secure additional funding.

“The Group is currently in discussions with leading financial institutions to secure funding to complement its healthy cash balances for deployment in carrying out accelerated material hotel refurbishment projects,” the group said.

While profitability was subdued, the group points to positive strides in revenue generation and occupancy rates.