After recently signing a lease for development for a 62-roomed hotel in Mahalapye, Cresta Marakanelo is pursuing two additional leases for development in Botswana which are expected to be signed during the second quarter of 2022.
This is revealed by Cresta Chairman Moatlhodi Lekaukau and Managing Director Mokwena Morulane in the latest financials of Botswana’s leading hotel services provider.
According to the two, Cresta is working on the leases mainly because the company believes in the future of the hospitality and tourism sector in Botswana.
According to the report, Cresta’s revenue in the 2022 financial year has been increasing steadily on a month-to-month basis. So far, compared to the prior year, the growth is over 95 percent while only 9 percent below the pre-COVID revenue levels of the 2019 financial year.
“This steady improvement in performance indicates the recovery trajectory of the hospitality and tourism industry,” they say in Cresta’s financial results for the year ended 31 December 2021 released recently.
“The Group expects to continue to see improved performance throughout the coming year. Despite these signs of the business rebounding, the Group will continue with its cash preservation measures, while building up cash resources for a phased refurbishment of the properties.”
Lekaukau and Morulane state that Cresta’s total assets decreased by 3 percent in the year under review compared to the year ended 31 December 2020. “The decrease in assets was primarily because of the capital expenditure freeze and the depreciation of assets,” they wrote.
“This decrease was partially offset by the increase in right of use assets, following the 10-year extension of the Cresta Mahalapye Hotel lease, as well as the increase in deferred tax assets recognised.
“Total liabilities increased following the recognition of P30 million Cresta Mahalapye lease liability as well as a P25 million working capital facility drawdown made during the year. The Group had cash resources of P53.2 million (2021: P56.7m) at the end of the year.”
They note that during the year under review, P15.6 million was generated from continuing operations, which is a significant improvement from the prior year when P8.6 million was utilised in operating activities.
“The improvement was due to the increase in revenues and the improvement in working capital management,” Lekaukau and Morulane wrote in the report. “Net cash utilised in investing activities amounted to P6.1 million (2020: P17.7m utilised). The reduction in cash outflow on investing activities was due to the capital expenditure freeze as well as the inclusion in the prior year of P9million related to the acquisition of a hotel property.
With regards to financing activities from continuing operations, P10.4 million (2020: P18.2m) was utilised, split between bank loan repayments of P14.9 million (2020: P10.3m) and leasing hotel properties P20.5 million (2020: P16.9m). 2021 financing activities were lower because of a receipt of P25 million (2020: P9.0m) borrowings.”