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executive Dr Shingi Munyeza told an annual general meeting on Friday, revenue — which was 1,7 percent ahead of the budget — could be surpassed if growth in revenue per average room continues.
RevPAR was 16 percent up to US$42,20. Revenue from foreign arrivals grew by 25 percent. The occupancy rate remained static at 50 percent while average daily rate rose by 20 percent.
“The group has completely turned the corner and our hotels are now in a profitable position. We are hoping to close our financial year (September 30) in a very profitable position,” said Dr Munyeza.
EBITDA margin for the period was 11 percent compared with 1 percent last year.
Cost of sales improved to 28 percent from 31 percent, following the closure of South African hotels.
Head office costs were down 40 percent following the restructuring exercise, which was completed in October last year.
Borrowings are at US$13,41 million, consisting of US$8,76 million short-term and US$4,65 million long-term borrowings.
Dr Munyeza said the African Sun Group was in the process of restructuring debt to reduce the effective cost of borrowing and exposure.
Dr Munyeza said the hotels refurbishment was now underway, with the Holiday Inn Harare, Holiday Inn Bulawayo and Crowne Plaza Monomotapa expected to be completed by June.
Thereafter, the refurbishment of the Victoria Falls hotels would begin.
African Sun would continue pursuing management contracts in West Africa and Southern Africa. Forward bookings were also looking good.
Meanwhile, Africa Sun and Dawn Properties have reached an agreement on tenor of leases and rentals to meet the expectations of both companies.
Out of 12 hotels run by African Sun, eight properties are owned by Dawn.
A source said a Memorandum of Understanding is being worked out.
“African Sun has valid leases with Dawn of up to 40 years but Dawn was not comfortable with such long tenure leases,” said a source.
“The two companies are also finalising the issue of rentals and other strategic implications on the portfolio managed by Dawn Properties.”
African Sun owns about 13 percent of Dawn Properties.
Online Reporter