African Sun in 19% revenue growth

African Sun in 19% revenue growth
Published: 16 March 2018
AFRICAN Sun Limited has recorded a 19 percent growth in revenue to $51,83 million for the year ended December 31, 2017, spurred by a jump in occupancy levels.

The international market recorded the highest growth of 29 percent due to improved air accessibility particularly to Victoria Falls where passengers increased from under one million to about 1,5 million last year.

Passenger arrivals have been surging in Victoria Falls since November 2016, when the new Victoria Falls International Airport, was commissioned after its refurbishment at a cost of $150 million.

Domestic occupancies also grew by 17 percent in the period under review after the group tweaked its pricing regime.

African Sun — just like other hospitality companies — also introduced continuous market promotions throughout the year.

Occupancies could have been even higher if the regional traffic — mainly from South Africa — had not been affected by a firm US dollar, which made the destination relatively expensive.

Considering that the economy has become a buyer's market, African Sun maintained 2016's average daily rate of $93 so as to boost occupancies.

"This strategy, coupled with the drive for increased occupancies, produced a Revenue Per Available Room (RevPar) of $48, which was a growth of 17 percent from the previous year," said African Sun in a statement.

All the initiatives, together with astute cost containment and reduction strategies, helped to improve the bottom line for the group despite a challenging economic environment characterised by rising inflation and premiums charged to access foreign currency.

African Sun shrugged off the impediments to record an Earnings before interest, taxes, depreciation and amortisation (EBIDTA) of $8,67 million, representing a 53 percent jump from the comparative period.

Going forward, African Sun's hotel operations are expected to benefit from key activities slated for this year, which include harmonised elections, infrastructure development and other key projects spelt out by the Minister of Finance and Economic Planning Patrick Chinamasa in the 2018 National Budget.

The group also expects to benefit from the drive spearheaded by the Ministry of Tourism and Hospitality Industry to promote domestic tourism.

The coming in of Ethiopian Airlines' Boeing 787 Dreamliner aircraft into Victoria Falls since March 12 this year, and reports that more international flights are scheduled to land in the tourist resort, is expected to boost arrivals and consequently occupancies.

African Sun, which has more hotel rooms in Victoria Falls, plans to benefit from the expected surge in passenger arrivals and boost its bottom line.

The group declared a final dividend of 0,0697 cents per share for the year to December 31, 2017.
- herald
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