Debts weigh down RTG

from the prior year in which the group posted a loss of US$1,1 million.
Turnover was up 32 percent to US$27,3 million from US$20,7 million in 2010.
The group’s earnings before interest, taxes, depreciation and amortisation (EBIDTA) increased by 863 percent to US$2,7 million from a negative position of US$354 441 in the previous year.
Profit from continuing operations was US$1,7 million, which was a significant improvement from the operating loss of US$1,3 million that was posted in the prior year period. Average room rate during the period rose 10 percent to US$75 from US$68 in the prior year.
Management attributed the depressed performance to delays in the implementation of the company’s recapitalisation programme, which led to high borrowings and resultantly, high interest rate charges.
The company’s debt closed at US$23,1 million, and is composed of US$12,3 million in short-term debt and US$10,8 million in long-term debt.
RTG finance director Mr Paschal Changunda — who will next month assume the position of acting chief executive officer following the resignation of Ms Chipo Mtasa — on Wednesday told analysts that the recapitalisation programme has commenced and should be completed during this year. “The recapitalisation exercise should be completed this year. One of our key focus areas is to reduce short-term debt,” he said.
Management also attributed the loss position to the poor financial performance to some of its subsidiaries (Touch The Wild, Tourism Services Zimbabwe and Hathanway Investments), which have been lined up for disposal.
According to Mr Changunda, the disposal of these subsidiaries, which will all be cash transactions, is expected to raise around US$2,3 billion. The discontinuing operations posted an operating loss of US$916 741.
Outgoing group chief executive officer Ms Mtasa said the company was at “agreement stage” for most of the non-core assets concerning their disposal. She also said the group’s image was poised for a complete rebranding.
“The group is due for a major rebranding exercise in line with the shedding off of the non-core assets.
Meanwhile, Mr Changunda said the refurbishment of the Rainbow Towers Hotel and Conference Centre has resumed as they are now accessing the funds from Renaissance Merchant Bank.
“Following the restructuring at RMB we have started withdrawing the project funds from RMB,” he said.
“The refurbishment of the hotel should take about 10 months and we are looking to utilise around US$5 million,” he said.
In respect of the Beitbridge Hotel project Mr Changunda said the superstructure of the hotel had been completed and they were looking to commence the fittings “within the next few weeks”.
The three-star Kadoma Hotel and Conference Centre is also undergoing refurbishment and will be streamlined to offer “limited service in line with global standards”, said management. Management is forecasting their topline to grow by 20 percent in the outlook period.