Victoria Falls Stock Exchange listed hospitality group, African Sun Limited, has revealed that the decision to sell Great Zimbabwe Hotel in Masvingo and Beitbridge Express Hotel was part of the company’s strategic plan to optimize its portfolio and drive growth.
After deeming them non-core assets, African Sun sold the two hotels for a combined US$6,9 million to TD Hotels and Leisure (Private) limited, an upcoming local hospitality concern.
The sale, according to the company’s half-year financial results, is expected to support African Sun’s refurbishment plans for its key hotels and enhance its competitiveness in the market. The transaction is expected to be completed before the end of the year.
“To expedite the refurbishment of several key hotels in our portfolio, the Board resolved to complement capital-raising initiatives by selling selected assets that are considered not core to the Group’s future positioning.
“The Beitbridge Express Hotel and Great Zimbabwe Hotel were earmarked for sale, with an Agreement of Sale executed subsequent to the reporting date. The transaction is expected to be completed before the end of the year,” the group stated.
According to the financial report, the group recorded a 14% increase in revenue to US$25.58 million for the half-year ended June 30, 2024, driven by higher average daily rates and improved hotel occupancy.
African Sun, however, posted a loss after tax of US$2.17 million, largely due to non-recurring costs.
The company maintained a strong liquidity position, with cash and cash equivalents of US$10.56 million, and declared an interim dividend of US$0.0003381 per share.
The group expects increased international travelers and conference business in the second half of the year, but remains cautious about macroeconomic challenges, including slow economic growth, inflation, and global uncertainties.
The macroeconomic environment is likely to remain tough, as the effect of the low rainfall is anticipated to be greater than previously anticipated, as evidenced by the slowdown in economic growth to 2% as predicted by the IMF (International Monetary Fund).
“Ongoing global inflation, supply chain disruptions, and rising commodity prices may result in higher transportation and accommodation costs, potentially constraining spending patterns and demand throughout the forecast period.
“Additionally, geopolitical tensions and trade uncertainties are expected to continue for the foreseeable future. The Group remains vigilant and agile in addressing these challenges to ensure we create sustainable value for all our stakeholders,” the company noted.
Meanwhile, Grant Thornton Chartered Accountants (Zimbabwe) has given African Sun Limited’s interim condensed consolidated financial statements for the six months ended June 30, 2024, a thumbs up.
The review, conducted in accordance with International Standard on Review Engagements 2410, found that the financial statements “present fairly, in all material respects, the financial position of African Sun Limited”.
African Sun Limited has made changes to its expense classification, shifting from a functional to a natural classification basis, effective January 1, 2024. This change has been reflected in the prior year’s expenses.
Edmore Chimhowa, Partner and Registered Public Auditor at Grant Thornton, led the review engagement.
