Listed hospitality firm, African Sun, is still feeling the lingering effects of the Covid-19 pandemic, with occupancies remaining subdued.
In the first quarter to March 31, 2021, the group’s occupancies were down 26 percentage points, compared to the prior comparable period.
Although 2021 started with another hard lockdown in Zimbabwe, it had been effectively lifted for the last months of the quarter.
But the travel and hospitality industry is, expectedly experiencing the long-term effects of the pandemic, with visitors unlikely to begin venturing in their numbers anytime soon.
African Sun’s occupancy for the quarter under review stood at 14 percent, representing a 26 percentage points decline compared to 40 percent that was recorded during the same period last year (prior to any lockdowns in Zimbabwe).
Inflation adjusted revenue for the first quarter was down 64 percent at $279,52 million against $784,82 million achieved in the prior comparable period.
Management said included in the current year revenue is $26,14 million (9 percent) from the recently acquired subsidiary Dawn Properties Limited.
The group’s inflation adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $5,91 billion due to the bargain purchase of $5,96 billion from the acquisition of 91,17 percent of Dawn in January 2021.
“The bargain purchase was largely a result of inflation driven fair value adjustments on Dawn’s investment properties post establishment of the share swap ratio. “In United States dollar terms, Dawn’s net assets declined by 6 percent to US$80,66 million as at 31 December 2020 from US$85,59 million as at December 31, 2019,”
said the group.
Meanwhile, normalised EBITDA for the period was a loss of $51,39 million, and accordingly the group reported a loss before tax of $165,57 million from operations.
African Sun’s financial position improved during the period under review largely driven by an increase of $5,54 billion in property and equipment following the consolidation of Dawn.
In terms of liquidity, the hospitality group closed Q1 with cash and cash equivalents of $737,23 million; an 8 percent decline from $799,37 million reported on December 31, 2020.
Management said the group has two undrawn facilities amounting to $318 million
“which will be utilised should the need arise.”
Going forward, the business says it will leverage on domestic business as global travel routes remain difficult due to the pandemic.