Hotelier African Sun widened its loss for the year to September by 47 percent to $3.36 million as the group incurred huge retrenchment costs following its exit from the regional market.
In September, the group terminated the lease agreement for its Amber Accra Hotel in Ghana due to continued losses and also ceased its operations in Nigeria. The losses were due to a high fixed costs structure, and a slow revenue upturn.
The loss for the year from the Ghana operations was $1.97 million, from a loss position of $1.64 million. Loss from continuing operations was $1.39 million from a prior year loss of $640 000.
“The current year loss was driven by the $4.23 million that was incurred by the company on other expenses which include retrenchments and separation costs of $2.02 million,” said board chair Herbert Nkala in a statement accompanying company results on Friday
“Following the change of business model, discontinuation of the loss making operations in Ghana and Nigeria as well as the recent retrenchments, the group is poised to move from a loss making position to a profit position,” said Nkala.
Finance costs declined by 32 percent to $3.1 million following repayment of borrowings amounting to $9.1 million.
The group achieved revenue of $50.15 million, eight percent lower than the previous year. Nkala said the drop in revenue was mainly as a result of a seven percent reduction in the average daily rate (ADR) from $96 achieved last year. The ADR was partly affected by the introduction of VAT on foreign revenue.
Occupancy levels recorded a marginal increase from 47 to 48 percent. Revenue per available room (RevPAR) fell four percent to $43.
EBITDA achieved for the period under review registered a 33 percent drop to $5.47 million.
Basic loss per share increased to 0.17 cents from 0.08 cents.-The Source