Wilderness Holdings has released its financial results for the year ended February 29th 2016 and says demand was weak during the first half because of the Ebola outbreak and the strength of the US Dollar against other destination currencies.
According to Wilderness Holdings Chief Executive Officer (CEO) Keith Vincent, Botswana and South Africa reported an improved segmental profit of 11 percent and 7 percent, respectively.
“Zambezi reported a decline in segmental profit largely because of discounted flying to promote occupancy and lower demand from Asia for the road transfer business,” he said.
He said the level of forward cover taken to hedge against foreign exchange conversion risk remained at zero adding that this will continue until, in the opinion of the board, the risks to the business make the necessary cover.
Reversals of impairment amounted to P0.8 million and arose mainly from the P3.4 million reversal of previous impairments of Zambian assets as a result of lease renewals. These were offset by P2.5 million due to the damage of two aircrafts. He stated that the remaining balance is attributable to impairment of loans receivable and property, plant and equipment.
“The Group’s strategic intent has been to invest in African tourism markets which offer authentic wildlife and safari experiences,” Vincent stated.
The report also reveals that net finance costs remained flat at P4.3 million, compared with P4.6 million from the previous year. The Group’s effective tax rate increased from 30 percent in the prior year to 38 percent in the current year. The effective tax rate is higher than the group’s nominal rate of 22 percent. Vincent blamed this on dividend payments by the subsidiary companies to the holding company in the current year which resulted in additional withholding and dividends taxes, higher tax rates in other jurisdictions and expenses not claimable.
Wilderness also said cash generated improved by 3 percent due to positive working capital movements due to prepayments and deposits amounting to P20 million in the prior year.
Net bank balances decreased by 14 percent to P202 million as a result of debt reduction of P9 million, increased capital expenditure and the increased dividend payment. New facilities amounting to USD35 million to finance the group’s expansion plans have been negotiated and are expected to be available for drawdown during May 2016. Overall, the net asset value per share and net tangible value per share increased by 7 percent and 9 percent, respectively.