Closure of loss making hotels minimise ASL loss
AFRICAN Sun Limited (ASL) says the closure of loss-making ventures such as Amber Hotel in Ghana and Beitbridge Express minimised the group’s loss in the five months to May to US$740 000 from US$1,87 million last year.
ASL managing director, Edwin Shangwa, said measures the group under took to close loss-making units and cutting cost had reduced the group’s loss.
“The cost reduction measures we embarked on since last year are paying off. We anticipate the same trend to continue throughout the year. A staff rationalisation exercise also reduced the group’s workforce to 1 179 from 1 490…Expenses have gone down by 17 percent during the five months,” he said at the group’s annual general meeting (AGM).
Shangwa said the US$1,87 million loss last year was due to once off factors such as retrenchment packages and discontinued operations.
ASL has exited all operations outside Zimbabwe. He said the group had reduced its debt to aboutUS$8 million from US$17,4 million. Revenue earned per available room (Rev Par) was down 17 percent to US$34.
“We would recover in the second half of the year which is traditionally the busiest period,” said Shangwa.
Revenues declined 23 percent to US$14,1 million in the five months. The decline was attributed to a drop in arrivals mainly from South Africa due to the strengthening of the United States dollar against the rand as well as a subdued domestic market.
At the AGM, George Manyere, the chief executive officer of Brainworks Capital, the major shareholder in ASL, said the group was planning to spend US$25 million expanding the Monomotapa Hotel, once the City of Harare approves its request to acquire a portion of the Harare Gardens. The council deal is reported be worth around US$2 million.
Monomotapa Hotel, formerly Crowne Plaza, plans to construct an international conference centre and an open air restaurant among other leisure facilities. The new development will be at a site currently used as a parking lot that also includes a public swimming pool and gym.
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