Africa Sun rides on ZiG stability

Nyashadzashe Ndoro

CHIEF REPORTER

African Sun Limited, a leading hospitality group in Zimbabwe, reported a positive performance for the first quarter ended March 31, 2024, despite a challenging economic environment.

The company highlighted the recent introduction of the Zimbabwean Gold currency with cautious optimism, acknowledging both its potential and remaining hurdles.

“The recent introduction of the Zimbabwean Gold currency at the beginning of the second quarter sparked a renewed sense of optimism, aimed at fostering stability in prices and exchange rates by instilling market confidence,” said African Sun Limited in a press release.

The company, however, went on to add, “access to foreign currency through formal channels remains critical, particularly given the suspension of the Auction System following the introduction of the new currency.”

The trading update revealed a 40% increase in revenue for Q1 2024 compared to the same period last year, driven by higher demand for conferences and a strong domestic market. The Group also reported an improvement in profitability, with a loss before tax of US$1.27 million compared to US$1.85 million in the first quarter of 2023.

“We expect continuing improvements in business, driven by the recovery of the international market,” the press release stated.

While the outlook seems positive, African Sun acknowledged the ongoing challenges of obtaining foreign currency. The Reserve Bank of Zimbabwe suspended the foreign currency auction system with the introduction of the ZiG, leaving businesses reliant on formal channels for forex access.

Despite this hurdle, African Sun Limited remains focused on growth and announced plans for major capital investments in hotel refurbishments and digital infrastructure upgrades. The company also declared a final dividend of US$350 000 for the 2023 financial year.