RTG reviews Mozambique operation after poor performance
THE Zimbabwe Stock Exchange-listed leisure chain, Rainbow Tourism Group (RTG), has made strong indications of big changes to its Mozambican operations following losses.
Chief executive officer, Tendai Madziwanyika, told a recent annual general meeting that the group will be taking “robust” decisions of the operation, although he did not say what action would be taken.
However, the RTG boss has been ringing changes in the group to return to profitability, including the recent closure of its operation in Beitbridge, which was making losses.
RTG’s foreign revenues, which are represented by the Mozambique operation, declined to US$1 million during the year ended December 31, 2015, from US$1,3 million the previous year.
Earnings before interest, tax, depreciation and amortisation for operations outside Zimbabwe slumped to minus US$51 756, from US$99 568 the previous year and losses before tax and interest during the period were US$117 860, compared to a profit of US$61 631 the previous year.
“While Zimbabwe hotels registered strong performance, Rainbow Hotel Mozambique’s revenues were down by 46 percent in comparison to same period in 2015. The hotel has continuously recorded declining revenues year on year and this subdued performance is attributable to the current political instability in Mozambique,” he said.
RTG’s revenue for the four months to April 2016 increased 13 percent on the comparative period last year to US$8,6 million driven primarily by strong showing in their Zimbabwe hotels.
He said despite continued liquidity shortages, Zimbabwe hotels’ performance remained positive.
“The group’s revenue grew by US$1 million to US$8,6 million in comparison to US$7,6 million in prior year. The growth was driven by the Zimbabwe hotels which continued to register strong performance despite the continued liquidity challenges being experienced in the economy,” he said.
The group’s occupancy rate grew to 48 percent from 38 percent recorded same period in 2015, while market share increased to 32 percent compared to 27 percent recorded during prior year.
In the period under review the group’s costs declined by US$1,3 million while year to date total operating costs reduced by 17 percent compared to prior year.
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