Tsogo Sun Hotels core profit hit by travel restrictions
DURBAN - South Africa’s Tsogo Sun Hotels on Friday reported a 9 percent fall in annual core earnings and did not declare a final dividend, due to a sharp drop in local and international travel amid the coronavirus pandemic.
Tsogo Sun said earnings before interest, income tax, depreciation, amortisation, rent, long term incentives and exceptional items (EBITDAR) for the year ended March 31 fell to R1.4 billion, from R1.5 billion a year earlier.
One of South Africa’s biggest hotel groups, with brands such as Southern Sun and Garden Court, said it was planning for a phased reopening with certain hotels to resume operations as soon as they are allowed with increased safety measures.
The company said last week it expected annual core earnings to fall up to 10 percent.
“Trading during the first nine months of the financial year was impacted by the depressed local macro-economic environment with demand by corporate and leisure groups as well as the transient traveller showing little sign of recovery,” the company said.
The pandemic had a marked impact on fourth-quarter trading with international demand falling as early as the last week of February, the company said in its first set of annual results after its unbundling from Tsogo Sun Gaming Ltd.
Tsogo Sun Hotels, one of many tourism companies to be hit hard by virus outbreak, has also temporarily laid off employees and has had to reduce pay for all levels including executive management and board members.Reuters