AFRICAN SUN LIMITED!
F14 H1 Results Presentation
AGENDA!
1.!
Strategy and Operations Review
Group CEO – Dr Shingi Munyeza!
2.!
Financial Review
Group Finance Director – Ni...
STRATEGIC REVIEW!
SUSTAINBILITY OF OUR STRATEGIC THRUST: THE
UPDATE!
Strategic goal Comment/update
Debt restructuring Disposal of 16.54% Daw...
SUSTAINBILITY OF OUR STRATEGIC THRUST: THE
UPDATE!
Strategic goal Comment/update
Value creation and
cost containment
Ghana...
MARKET DEVELOPMENTS
Holiday Inn Harare!
MARKET DEVELOPMENTS: INTERNATIONAL ARRIVALS
DRIVE OUR ADR !
Notable growth trends from last year
• Zimbabwe ▼ 10%
• Italy ...
ARRIVAL TRENDS – KEY SOURCE MARKETS!
ABOUT TO TAKE OFF!
GRIDLOCK!
!
Source Market F 10 F 11 F 12 F 13 H1 F13 H1 F14 H1 14/...
AIR CAPACITY INTO VICTORIA FALLS AREA INCREASES!
• A 12% increase in seats is required to satisfy demand for room nights i...
ASL ADR UP 4%
ADR up 4% to $97;!
•  Spurred by resilient foreign market whose ADR was up 14% on PY!
•  Ghana market with s...
ASL HOTELS - REVPAR - F12 - F14 YTD

!
REVPAR F12 F13
October'2122
To2March2
2013
October'2132
To2March2
2014
April&to&
Ju...
FINANCIAL REVIEW
Holiday Inn Bulawayo
FY 2014 H1 PERFORMANCE IN BRIEF
!
!
!
!
!
!
INTEREST
$1.397M [5.5%
of Revenue ]!
EBITDA AND PROFITABILITY!
•  Revenue down 4%:
-6.65% :Domestic volumes
•  EBITDA impacted by:
•  + 2% increase in operatin...
OPERATING COSTS POSITION IMPROVING FOLLOWING
IMPLEMENTATION OF OUR INITIATIVES!
•  Cost of sales in line with budget and t...
PERFORMANCE BY HOTEL !
ABOUT TO TAKE OFF!
GRIDLOCK!
!
•  H1, FY2014 Performance driven primarily by half of the portfolio ...
SBU PERFORMANCE - ALL HOTELS PROFITABLE AND
SELF SUSTAINING!
ABOUT TO TAKE OFF!
GRIDLOCK!
!
Hotel Occ RevPar Revenue Gross...
CAPITAL STRUCTURE HEALTH AND BALANCE SHEET
Crowne Plaza Monomotapa
BALANCE SHEET - FINANCIAL MATTERS !
F14 H1
Actual
F13
Actual
US$m US$m
Assets
Long term assets 36.55 40.79
Current assets ...
DEBT REDUCTION PLAN – TARGET GEARING OF 30%!
ABOUT TO TAKE OFF!
GRIDLOCK!
!
US$m Proforma-
Post debt
reduction
F14 H1
Actu...
GROUP CASHFLOWS - $5.138M NET DEBT REPAYMENT!
ABOUT TO TAKE OFF!
GRIDLOCK!
!
US$m F14 H1
Actual
F13 H1
Actual
Cash generat...
OUTLOOK
Troutbeck Resort
2014 OUTLOOK:
H2 PERFORMANCE SET TO RECOVER!
•  Forecast 10% monthly growth (including Ghana) on revenues from
June to Sep...
2014 OUTLOOK:
INITIATIVES TO STRENGTHEN BUSINESS GROWTH !
•  Capital call is still being considered by the board and we wi...
2014 FOCUS: STRATEGIC PRIORITIES!
Sustainability anchored on:
• Financial stability through;
•  Low gearing – further debt...
2014 FOCUS: STRATEGIC PRIORITIES!
•  Online /Automated Channels!
•  Automated channels to contribute up to 40% of total re...
QUESTIONS AND ANSWER ?!
END!
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Africansun Limited HY 2014 financial results presentation

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Africansun Limited Listed on the Zimbabwe Stock Exchange has released its Half Year Results Presentation. Check out
insights into this company in their presentation which appears below.
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Africansun Limited HY 2014 financial results presentation

  1. 1. AFRICAN SUN LIMITED! F14 H1 Results Presentation
  2. 2. AGENDA! 1.! Strategy and Operations Review Group CEO – Dr Shingi Munyeza! 2.! Financial Review Group Finance Director – Nigel Mangwiro ! 3.! Outlook Group CEO – Dr Shingi Munyeza!
  3. 3. STRATEGIC REVIEW!
  4. 4. SUSTAINBILITY OF OUR STRATEGIC THRUST: THE UPDATE! Strategic goal Comment/update Debt restructuring Disposal of 16.54% Dawn shares raising $5.83 million Further balance sheet restructuring of $4.5 million Possible capital call Relationships with Landlords Negotiating win win lease agreements Cordial relationships Refurbishments All major refurbishments are complete. Future refurbishment will be funded through operating cashflows. A 40% of EBITDA reinvestment ratio will be applied
  5. 5. SUSTAINBILITY OF OUR STRATEGIC THRUST: THE UPDATE! Strategic goal Comment/update Value creation and cost containment Ghana will contribute at least 12% of the groups revenues in the next 4 months. This becomes the second largest contributor to RevPAR in the group behind The Victoria Falls Hotel. Targeting a saving of 5% on total costs compared to PY to the end of the year, amounting to $2.5million . Thus far we have saved 3% amounting to $500k . This excludes the Ghana operation which we expect to break even in this current financial year. Interest savings will follow the debt reduction and improve EBITDA .Interest savings of $362,000 following partial reduction of borrowings for 6 months to March
  6. 6. MARKET DEVELOPMENTS Holiday Inn Harare!
  7. 7. MARKET DEVELOPMENTS: INTERNATIONAL ARRIVALS DRIVE OUR ADR ! Notable growth trends from last year • Zimbabwe ▼ 10% • Italy ▲ 11% • German ▲ 11% • Japan ▲ 34% • UK ▲ 6% However, decline in international arrivals were recorded from; • USA ▼ 1% • France ▼ 17% • China ▼ 36% •  Our in-system booking to end of September shows a positive growth of 5% on all source markets +14% ! growth in Foreign ADR! 8% growth in Foreign Revenues!
  8. 8. ARRIVAL TRENDS – KEY SOURCE MARKETS! ABOUT TO TAKE OFF! GRIDLOCK! ! Source Market F 10 F 11 F 12 F 13 H1 F13 H1 F14 H1 14/H1 13 South Africa 20,030 24,124 21,388 20,428 10,309 7,947 -23% United Kingdom 2,447 3,355 3,103 3,913 1,899 2,005 5% France 3,359 3,532 3,573 3,268 2,046 1,703 20% Germany 2,686 2,848 3,422 4,029 2,302 2,556 10% Italy 3,396 3,206 2,804 2,391 789 876 10% Spain 1,157 1,748 2,294 2,196 815 818 0% USA 6,771 8,092 11,569 12,866 6,535 5,997 -8% Australia 2,259 2,851 3,701 3,705 1,315 1,232 -6% China 1,968 2,907 3,739 2,753 1,640 1,050 -36% India 789 903 685 1,226 535 942 43% Japan 2,569 4,301 4,672 6,128 2,880 3,773 24% Canada 884 2,022 1,588 1,626 1,041 860 -17% South Korea 1,095 941 845 2,117 809 822 2% Russia 360 276 398 486 277 599 54% Total 49,770 61,106 63,781 67,132 22,883 31,180 27%$ •  Japan shows good rebound after the tsunami! ! •  South Africa struggling with the depreciating Rand as Zimbabwe becomes an expensive destination! •  Local market is depressed due slow down in demand attributed to the current market conditions!
  9. 9. AIR CAPACITY INTO VICTORIA FALLS AREA INCREASES! • A 12% increase in seats is required to satisfy demand for room nights in peak period Total Seats Monthly 12040 Total Bed nights available Monthly 42056 Average length of stay 2.2 Seats required Monthly 13381
  10. 10. ASL ADR UP 4% ADR up 4% to $97;! •  Spurred by resilient foreign market whose ADR was up 14% on PY! •  Ghana market with second highest ADR in the group after TVFH! •  Trend to sustain until end of year! ! RevPAR for the full year to be improved by;! •  The rebound of H2 performance for Zimbabwe hotels will be buoyed by the Victoria falls hotels. Total RevPAR at September 2014 will be $94.! 46% 51% 52% 49% 47% 41% 74 80 91 100 93 97 0 0 0 0 0 0 65.00 79.00 95.00 94.00 89.00 81.00 0 28 55 83 110 0.00 17.50 35.00 52.50 70.00 87.50 105.00 2010 2011 2012 2013 F13 H1 F14 H1 $ Group KPIs ! OCCUPANCY% ADR REVPAR
  11. 11. ASL HOTELS - REVPAR - F12 - F14 YTD
 ! REVPAR F12 F13 October'2122 To2March2 2013 October'2132 To2March2 2014 April&to& June&2014 City&Hotels $ $ $ $ $ CPM 79 72 68 46 69 HIH 77 71 68 52 71 AHM 53 47 47 43 64 HIB 70 57 50 50 72 BEH 24 28 27 19 19 TOTAL 61 55 52 42 59 Resorts: TVFH 99 106 96 121 165 TKVF 33 36 32 33 44 EHRVF 33 25 21 26 75 CBR 28 14 33 31 39 TBR 41 39 44 45 57 GZH 38 37 37 36 70 HSL 16 16 15 12 17 TOTAL 41 39 40 43 67 Our city hotels are showing a RevPAR growth of 40% from March 2014 ! Our resort hotels are showing a RevPAR growth of 56% from March 2014!
  12. 12. FINANCIAL REVIEW Holiday Inn Bulawayo
  13. 13. FY 2014 H1 PERFORMANCE IN BRIEF ! ! ! ! ! ! INTEREST $1.397M [5.5% of Revenue ]!
  14. 14. EBITDA AND PROFITABILITY! •  Revenue down 4%: -6.65% :Domestic volumes •  EBITDA impacted by: •  + 2% increase in operating costs, impact of the introduction of the Ghana lease •  Finance Costs down 10%; following debt reduction at the beginning of the year, and 28% reduction excluding costs previously capitalized. •  Further interest reduction expected after completion of debt reduction ABOUT TO TAKE OFF! GRIDLOCK! ! Profitability growth to be spurred by growth in ADR, interest savings and further cost reduction! US$ millions F 14 H1 F 13 H1 ▲ Revenue 25.33 26.44 -4% Cost of sales (7.64) (7.61) - Gross profit 17.69 18.84 -6% Operating expenses (16.90) (16.61) 2% EBITDA 2.17 3.48 -38% EBITDA margin % 9 13 - Key Indicators Finance Costs (1.40) (1.54) -10% Exceptional items (0.33) - - (Loss) / profit BT (0.81) 1.23 -166% Headline earnings (0.81) 0.91 -189% Occupancy 41 47
  15. 15. OPERATING COSTS POSITION IMPROVING FOLLOWING IMPLEMENTATION OF OUR INITIATIVES! •  Cost of sales in line with budget and target, and set to improve with; •  Further negotiated deals •  Improved efficiency in Ghana •  Operating costs up 2% from last year; •  Zimbabwe segment down 3% following initiatives implemented during the period •  Increase is a result of a new hotel in Ghana •  Oversight costs down 27% from last year; •  Now 8% of revenue •  Ratio to improve to our target of 7% as revenue !
  16. 16. PERFORMANCE BY HOTEL ! ABOUT TO TAKE OFF! GRIDLOCK! ! •  H1, FY2014 Performance driven primarily by half of the portfolio and to increase as rest of portfolio improves.! •  Elephant Hills Performance to recover loss by year end and register growth by 5%! ! •  Amber Accra Ghana profitable from June and to reverse EBITDA loss before end of year! !
  17. 17. SBU PERFORMANCE - ALL HOTELS PROFITABLE AND SELF SUSTAINING! ABOUT TO TAKE OFF! GRIDLOCK! ! Hotel Occ RevPar Revenue Gross Profit EBITDA 2014 EBITDA 2013 ▲ % Crowne Plaza Monomotapa 44% 46 3,576 2,491 897 780 15% Holiday Inn HRE 51% 48 3,506 2,592 960 1,114 -14% Holiday Inn BYO 53% 50 2,614 1,821 606 594 2% Amber Hotel Mutare 58% 43 1,370 925 294 645 -54% Beitbrige Express Hotel 32% 19 566 383 (11) 301 -104% Elephant Hills Resort 27% 27 2,624 1,560 (122) 295 -141% The Kingdom Hotel 36% 34 3,397 2,360 399 379 5% The Victoria Falls Hotel [50%] 54% 122 2,961 2,206 956 742 29% Hwange Safari Lodge 16% 12 556 355 (27) 92 -130% Troutbeck Inn Resort 57% 46 1,462 968 353 425 -17% Carribea Bay Resort 39% 32 1,040 704 74 73 1% Great Zimbabwe Hotel 50% 36 663 459 103 139 -26% Casino Division n/a n/a 426 426 (144) 255 -156% Vacations n/a n/a 246 246 32 (10) 416% Amber Accra Ghana Hotel 14% 27 327 198 (582) - - PCC-Other n/a n/a 133 133 357 159 125% Sub-Total 42% 41 25,467 17,827 4,144 5,983 -31% Head Office Costs-net n/a n/a n/a n/a (2,130) (2,395) -11% TOTAL 42% 41 25,467 17,827 2,014 3,588 -44% •  Elephant Hills to recover loss by year end and register growth by 5%! •  Amber Accra Ghana profitable from June and to reverse EBITDA loss be end of year!
  18. 18. CAPITAL STRUCTURE HEALTH AND BALANCE SHEET Crowne Plaza Monomotapa
  19. 19. BALANCE SHEET - FINANCIAL MATTERS ! F14 H1 Actual F13 Actual US$m US$m Assets Long term assets 36.55 40.79 Current assets 17.99 18.79 Total assets 54.44 59.58 Equity and liabilities Shareholders equity 14.48 15.91 Non-current liabilities 11.85 14.46 Current liabilities 28.11 14.21 Total equity and liabilities 54.44 59.58 Gearing 52% 53% The impact of partial reduction in short-term loans is; •  3% reduction in net current liability position •  14% improvement in net debt position •  Slight improvement in the gearing to 52% from 53% reported at the end of September 2013! Net current liabilities position predominantly arising from short-term loans! ! Short-term loans split;! • $2.5m Ghana loan – facility to be restructure to medium term in September ! • $2.5m Afreximbank current portion! • $7.9m local loans – to be refinanced through our capital raising! !
  20. 20. DEBT REDUCTION PLAN – TARGET GEARING OF 30%! ABOUT TO TAKE OFF! GRIDLOCK! ! US$m Proforma- Post debt reduction F14 H1 Actual F13 Actual Long-term! 4.647! 5.847! 8.093! Short-term borrowings! 2.762! 12.762! 14.228! Total debt$ 7.409$ 18.610$ 22.321$ Cash! (3.147)! (3.147)! (4.232)! Net debt$ 4.262$ 15.463$ 18.089$ Equity! 14.477! 14.477! 16.080! Capital employed$ 18.709$ 29.941$ 34.169$ Gearing! 23%! 50%! 53%! Net current (liabilities)$ (5.96)$ (9.85)$ *(8.56)$ •  Gearing to reduce to 23% when debt reduction plan is completed •  Net current liabilities to improve to $5.96m from $10m •  Improvement in performance and capital call to deal with remaining negative working capital Target debt reduction of $10.33m structured as •  $5.83m from the disposal of investment in Dawn •  $4.5m other initiatives •  A possible capital call New capital structure to improve ability to self fund future capex – targeting 40% of EBITDA reinvestment •  *Excludes $1.64m Bridging Loan to be converted to long term!
  21. 21. GROUP CASHFLOWS - $5.138M NET DEBT REPAYMENT! ABOUT TO TAKE OFF! GRIDLOCK! ! US$m F14 H1 Actual F13 H1 Actual Cash generated from operations$ 3.004! 5.068! Interest$paid$ (1.397)! (1.546)! Net$Cash$generated$ 1.607$ 3.521$ Investing activities$ 0.780$ (2.376)$ Capex$ (3.478)! (2.376)! Disposal$of$Investments$ 4.258! Cash used in financing activities$ (4.833)$ (0.707)$ Debt$raised$$ 0.987$ 5.313$ Debt$Repaid$ (6.217)$ (6.019)$ Other$proceeds$ 0.307$ (Decrease) / increase in cash (2.446)! 0.439! Opening cash and cash equivalents! 1.608! 1.460! Exchange gains / (loss)! 0.023! (0.034)! Cash and cash equivalents$ (0.814)$ 1.865$ Drop in cash generated from operations a result of reduced revenues, however recovery expected in H2 Cash generated from investing activities of $0.78m relates to; •  $3.392m capex •  $4.225m proceeds from sale of investments (12% in associate) Cash used in financing activities of $4.833m split as; •  $1.518 repayment of long-term loans •  $3.62 net-repayment of short- term loans •  $0.308m sale of shares and utilization of deposit
  22. 22. OUTLOOK Troutbeck Resort
  23. 23. 2014 OUTLOOK: H2 PERFORMANCE SET TO RECOVER! •  Forecast 10% monthly growth (including Ghana) on revenues from June to September 2014. •  June 2014 has recorded a 9% growth on PY (and 22% growth on PY including the Ghana property). Recovery from the H1 position will be driven by; •  Service excellence •  Optimising efficiencies in Ghana operation •  Further cost reductions which will be 5% lower than PY •  Resilient foreign market – expected to drive recovery in resort hotels and improve the Group’s ADR •  Superior performance of the Victoria falls properties up to September
  24. 24. 2014 OUTLOOK: INITIATIVES TO STRENGTHEN BUSINESS GROWTH ! •  Capital call is still being considered by the board and we will come back and advise the shareholders. •  Further balance sheet rationalization will unlock $4.5million •  Refurbishments: All major refurbishments are complete. Future refurbishment will be funded through operating cash flows – target reinvestment ratio of 40% of EBITDA going forward. •  Further cost reduction through negotiated deals to improve operating costs Targeting a saving of 5% on PY total costs to $2.5million which will improve our EBITDA yield. •  Further staff rationalization to align costs to performance
  25. 25. 2014 FOCUS: STRATEGIC PRIORITIES! Sustainability anchored on: • Financial stability through; •  Low gearing – further debt reduction to net debt to below $10m •  Cash flow – further cost and financing costs reduction to improve cash generation from operations •  Asset quality – capital expenditure targeting hotel refurbishment will continue • Market share growth; •  Use our channels to grow international market •  Grow local market through loyalty programs
  26. 26. 2014 FOCUS: STRATEGIC PRIORITIES! •  Online /Automated Channels! •  Automated channels to contribute up to 40% of total revenues.! •  This will increase yield as automated channels are cheaper than traditional channels.! •  SEO strategy operational! •  Have now launched new website which is responsive! ! Check it out on www.africansunhotels.com!
  27. 27. QUESTIONS AND ANSWER ?!
  28. 28. END!

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