African Sun trims revenue growth expectation

Published: 10 June 2013

HARARE - African Sun is expecting revenue to rise by 8% in the year to September 2013, with EBITDA forecast at 12%, unchanged on last year, Group CE Shingi Munyeza told the AGM. At the briefing for F12 results in December last year, Munyeza forecast a 10% increase in revenues and 12% EBITDA.

He said revenue in the 4 months amounted to $18.04 million, and with operating costs down 4% in the period, EBITDA was sitting at 12% compared with 7% last year and profitability was ahead of last year. Revpar was up 8%, driven by a 19% increase in ADR.

The Victoria Falls Hotel had secured an increase in Revpar to $101 from $87, but the rest were broadly weaker, with Elephant Hills and the Kingdom both off a $1 at $38, while the Holiday Inn Harare was on $70 (vs $74) and Crowne Plaza Monomotapa was at $61 (vs $64).

Rooms sold were down 8% in the period due to ongoing refurbishments. Munyeza said the international arrivals into African Sun were up 8.7% at 29 850 (vs 27 451). America showed a 36.6% increase to 5 072 (vs 3 713), Asia was up 34.6% at 4 939, while Africa fell by 9.6% to 9 661, which Munyeza blamed on the 1-Time going into liquidation.

Negotiations to restructure the group's debt to longer term instruments was underway and he hoped there would be an announcement by the time the group's interim results are released in May. He said they would like to reduce the average rate of borrowing to 14% from 19% currently.

Refurbishments were going according to plan and would be completed at the Crowne Plaza and Holiday Inn Harare by June 2013. The e-commerce platform initiatives should see online bookings and transactions being launched by April.

Turning to preparations for UNWTO, Munyeza said there was a good deal of hype surrounding the event, but it just "another conference that we would have had in Zimbabwe". At the last UNWTO in South Korea, which he noted was served by better air links, there were around 600 delegates and 200 media. It would provide no special increase in profit, but an excellent opportunity to market Zimbabwe.

Shareholders approved remuneration for PWC of $206 000, a 23% reduction on F11, and directors fees of $95 961.
- zfn

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