The strengthening American dollar has been a boon for luxury tour operator Chobe Holdings, with its rise playing a role in Chobe’s impressive financial results for the six months ended 31 August 2022.
The Botswana Stock Exchange listed tourism group’s revenue surged by 377 percent to P234 million, propelled by 235 percent in occupancy rates. For the six months of the year, Chobe registered a P79.8 million in profit after tax, a 467 percent increase from 2021’s interim results.
“The loosening of travel restrictions associated with COVID-19 towards the end of the previous financial year has led to a significant improvement in the group’s financial performance over the reporting period, with the half-year results matching those achieved during the comparable period immediately pre-pandemic,” said Jonathan Gibson, the group’s chief executive officer.
He said the financial performance has been underpinned by steadily improving occupancies across the group’s wildlife properties. Chobe owns and operates twelve eco-tourism lodges and camps on leased land in northern Botswana and the Caprivi Strip in Namibia with a combined capacity of 317 beds under the brands of Desert and Delta Safaris, Chobe Game Lodge and Ker and Downey Botswana.
Sedia Riverside Hotel, a 31-room hotel owned by the group operates in close proximity to central Maun. Safari Air, an air charter operator, which provides air transport services to the group’s camps and lodges. North West Air Proprietary Limited, an air maintenance operation, which provides maintenance services to the group’s aircraft as well as third parties. Desert and Delta Safaris Limited, another wholly owned subsidiary operating in South Africa, provides reservation services to the group.
Gibson said bookings for the remainder of the financial year remain robust with the subsequent financial year showing similar resilience despite some uncertainties. “The effects of uncertainty in Europe have yet to be seen, but may be consequential if the conflict in the Ukraine escalates,” he said.
However, there are fears that the raging United States dollar which has strengthened dramatically over the course of the year might slow demand. The greenback has gained more than 17 percent against other basket of major currencies, with value of the dollar driven by high interest rates, making the currency attractive to investors as it is seen as a safe haven.
But so far, the stronger dollar has meant good business for Chobe as majority of the group’s revenue being received is in the American currency. Over the 12 months to October, the pula depreciated against the dollar by 15.2 percent, an exchange that benefits the company as it reports in pulas. With about P129 million in free cash, the group says the strong cash position presents the opportunity to take advantage of any expansion opportunities that may arise. In keeping with Chobe’s dividend distribution policy, no interim dividend has been declared in favour of a final year end declaration. As shareholders wait for the full year dividend, Chobe’s share price has gained 5.48 percent this year on the stock market.