African Sun returns to profitability

During the period under review, revenue increased 16 percent to US$26,1 million up from US$22,5 million recorded in the preceding period.
Occupancies were 52 percent in positive variance, compared with the six months last year as revenue per average room went up 23 percent to close at US$46 from last year’s US$37.

This resulted in earnings before interest, tax, depreciation and amortisation profit of US$2,17 million.
Chief executive Dr Shingi Munyeza said the group had turned the corner and would continue growing business to restore value.
He said the group was also excited by the eight new projects in West Africa and Zimbabwe. The projects would be under management contracts.

Foreign investment has continued to drive growth in West Africa, presenting an opportunity for further rooms growth within that market.
The group said Nigeria and Ghana would remain the primary focus as much of the growth was from the two countries.
However, the group is pulling out of one project in Ghana after it conflicted with one of its new projects.
Travel into Zimbabwe has also remained strong, with arrivals from Europe registering the highest increase of 16 percent, followed by the Pacific and the Americas at 14 and 8 percent respectively.

“We have also embarked on our second phase of refurbishment, consisting of the main hotels,” he said.
The first phase included six hotels — three city hotels and three resort hotels.
Commenting on negotiations with Dawn Properties, Dr Munyeza said a committee was set to deal with the matter.

It is understood that the committee agreed on seven hotels, except for one.
“The legal route cannot solve value creation for Dawn,” he said. “What we are doing is to restore shareholder value to assets and the primary reason is that for creation of value. I am confident that the issue would be resolved in the short to  medium term.”

Board changes also took place at the group. Mr Bhekithemba Nkomo is now the new chairman, taking over from Mr Tim Chiganze.
The group is optimistic of increasing profits as 70 percent are realised during the second half of the year.
Frequencies into Zimbabwe remain positive and the revival of flights into Harare and the Victoria Falls would increase accessibility, he said.