Records a loss before tax of P34.1 million in H1 2021
GAZETTE REPORTER
Results for Cresta Marakanelo Limited for the six months that ended 30 June 2021 show that headwinds occasioned by COVID-19 chapped business at Botswana’s leading hotel group considerably.
During the six months to June 2021, the government continued to implement a raft of measures imposed in December 2020 to try and curb the spread of COVID-19. These measures, which include restrictions on inter-zonal travel, bans on alcohol sales and limited numbers of conferencing guests, have had a direct effect of reducing the level of activity in hotels.
While the first quarter performance at Botswana’s leading hotel group Cresta was low because of the seasonality of the business, business was further slowed by COVID-induced low travel sentiment and pandemic mitigation controls in place, Group Chairman Moatlhodi Lekaukau has observed.
“The second quarter saw a rise in the performance of the business when compared to the first quarter, contributing 60 percent of the revenue generated for the six months ended 30 June 2021,” he says in the Group’s H1 2021 financials released recently.
According to Lekaukau, Cresta has nevertheless generated some wins. “The Group’s six months loss before taxation of P34.1 million was P8.4 million lower than same period last year which reported a loss of P42.5 million,” he states. “The main drivers for the reduction in the loss are the cost reduction measures implemented, some of which will be continued in the long term, even after the pandemic has been contained.”
Cresta’s revenue for the period under review is P96.5 million, 4 percent (P3.3 million) higher than that of the same period last year. Earnings before interest, tax, depreciation and amortization (EBITDA) achieved during the period was P2.2 million, an improvement on the prior year’s loss incurred of P2.5 million.
“The reduced market base has seen a surge in price wars in the industry, a variable which further puts pressure on the revenues of the business,” Lekaukau says. “The Group has been strategic and continues to focus on cost containment to ensure survival of the business through this difficult pandemic season.”
During the half year, P11.7 million (2020: P25.8 million) was utilised in operating activities, primarily due to the subdued revenues. “Net cash utilised in investing activities amounted to P2.5 million (2020: P14.4 million),” states Lekaukau.
“The reduction in cash outflow on investing activities was because of the capital expenditure freeze. With regards to financing activities, P15.2 million (2020: P4.1 million) was utilised, split between bank loan repayments of P3.7 million (2020: P1.5 million) and leasing hotel properties P11.5 million (2020: P11.6 million).
The Chairman notes in the results that Cresta staff members agreed to salary cuts implemented on a sliding scale beginning in July 2021. “This measure will enhance the business’s cash preservation efforts,” he says.
Cresta Hotels is one of Southern Africa’s leading hotel management groups, operating business and resort hotels in Zimbabwe, Botswana and Zambia.