Tourism and hospitality group, African Sun Limited (AfriSun) slumped to an inflation adjusted loss of $1,5 billion for the year ended December 2020 as the group took a hit from effects of the Covid-19 pandemic.
As one of the most popular places for holidaymakers, AfriSun just like the rest of the global tourism experienced its worst year on record in 2020 due to the Covid-19 pandemic due to various travel restrictions and measure that were put in place to curb the spread of the virus.
In 2019, the group posted a profit of $839 million. Due to low activity in the sector as a result of lockdowns which forced hotels and restaurants to close, AfriSun saw its revenue tumble to $1,84 billion from $4,10 billion the previous year. Revenue per available room was down to $1 626 from $3 805.
In a statement accompanying the group’s financials for the year ended December 2020, AfriSun chairman Alex Makamure said:
“The group recorded a low occupancy of 23 percent, representing a decline of 25 percentage points compared to 48 percent recorded in 2019. Room nights sold went down by 52 percent to 137 162 from 288 224 reported last year. The decline in room nights was across all market segments, with those attributable to export and domestic reducing by 82 percent and 35 percent respectively.”
He also noted that the group recorded its worst occupancies and volumes in April and May and shareholders suffered a basic loss per share of 174,64 cents down from earnings of 97,36 cents in 2019. The group did not declare a dividend.
Makamure indicated the decrease in revenue and volumes resulted in the Group posting an EBITDA of $5,42 million compared to $1,74 billion that was achieved in 2019.
“The inflation adjusted loss before tax of $1,86 billion is largely a result of the monetary loss of $1,50 billion, which is a result of applying International Accounting Standard (IAS) 29 Financial Reporting in Hyper-inflationary Economies,” he said.
The group initiated some cost containment measures during the year although the year was characterised by a reduction of economic and social activity due to the Covid-19 induced lockdowns as well as the temporary suspension of operations at all 11 hotels and two casinos at some point during the year.
Makamure was optimistic that the acceleration of Covid-19 vaccination programme and loosening of restrictions would unlock the industry’s fortunes.
“There are prospects of a rebound in the latter part of 2021 on the back of the current roll-out of the Covid-19 vaccines and attaining of the required herd immunity,” he said.
He added: “While we do not expect that there will be a quick recovery to previous trading levels, we are optimistic that the various cost saving initiatives and the renewed focus on improving the customer experience, the Group will recover from the Covid-19 pandemic.”
As at April 19 this year, Zimbabwe had recorded 37 751 coronavirus infections and 1 553 deaths since the pandemic broke out in March last year. With the vaccination cumulative for the first dose at 278 583 and the second dose at 35 863.
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