Sunday, April 21, 2024

Cresta’s Zambian hotel narrows losses

Cresta Marakanelo said on its interim results that its Zambian operation reduced losses on the prior year on the back of weakening of the local currency against the Pula.


The Botswana Stock Exchange (BSE) listed group stated on the unaudited half year results for the period ended 30 June 201 that Cresta Golfview Hotel recorded growth in revenues following the implementation of a strategy to win over clients.


“Trading conditions in Zambia continue to be challenging. The company however, came up with a strategy at the beginning of 2015, to win over lost business,” said Cresta in a financial statement.


The company said the strategy has fruits as revenues grew by 30 percent compared to the same period last year. “However, on the back of continued strengthening of the Pula against the Kwacha, the company recorded P2.1 million as foreign exchange loss on the Pula denominated loan used to finance the acquisition of the Zambia assets,” said Cresta.


“This resulted in the hotel recording a loss of P2.7 million for the half year compared to a loss of P4 million in the corresponding period in 2014”.


Equally, the company said conditions in the Botswana hospitality scene continue to be challenging especially with the rising competition. “The company’s operating of P14 million reflects an operating margin of 9.4% (2014:7.6%). This reflects strong cost control, the improved contribution to operating margins from most hotels during the first half of the year and also a P0.6 million reduction in lease straight-lining charges under IAS17.”


Cresta said it continues to innovate in a bid to attract and retain customers with the Cresta loyalty card membership continue to see growth.


“The company is seeing an increasing trend in spend and redemptions by these loyalty members and will continue to evaluate the range of benefits and conditions attaching to these schemes in order to enhance guest experience and loyalty.”


At the group level, revenues increased by 7 percent to P150 million from P139.7 million in the half year of 2014. Cresta also reported that the group’s net cash generated from operations stood at P24.2 million compared to P22.8 million in the corresponding period. Cash balances available at half year ending stood at P49.2 million from P20.2 million in the same period in 2014. 


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