Analysts briefing half year to march 2012 1

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African Sun Limited HY2012 analyst briefing

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Analysts briefing half year to march 2012 1

  1. 1. ANALYSTS BRIEFING HALF YEAR ENDING 31 MARCH 2012 STRENGTHENING THE CORE FOR GROWTH16 May 2012
  2. 2. GROWTH IN OUR MARKETS ABOVE GLOBAL AVERAGE• Foreign arrivals in our hotels up, increasing bed nights by 8%• Growth dominated by 16% from Europe, 14% Pacific and 8% Americas• However, Asia was down 13%• Zimbabwe tourism forecast to grow by 9.2% in 2012, ahead of Africa’s 4%-6%
  3. 3. BUSINESS UPDATE• Refurbishment of 3 city hotels underway• Rollout of IT systems upgrade to improve efficiencies• Re-launched Holiday Inn Harare and Bulawayo in line with new IHG standards• Rebranded Holiday Inn Mutare and Express By Holiday Inn to African Sun Amber Hotel Mutare and Beitbridge Express respectively• Leases with Dawn  7 hotels agreed on  1 still being negotiated
  4. 4. HOTEL REVPAR PERFORMANCE UPDATEHOTEL March 2012 March 2011 GrowthVictoria Falls $79 $54 46%Crowne Plaza $70 $55 27%Holiday Inn Harare $63 $55 15%Holiday Inn Bulawayo $56 $56 -Amber Hotel Mutare $54 $46 13%Troutbeck Resort $45 $40 17%Great Zimbabwe $40 $32 25%Elephant Hills $34 $20 70%The Kingdom $34 $33 3%CarIbbea Bay Resort $29 $24 21%Beitbridge Express $28 $32 -13%Hwange Safari Lodge $13 $9 44%• Dominance from the city hotels arising from strong conference business• Victoria Falls hotel benefiting from increased foreign arrivals
  5. 5. FIRST PROFIT SINCE DOLLARISATION• Strong recovery at the hotels in Victoria Falls in spite of reduced airline seat• Benefits of our drastic cost cutting initiatives crystallized• Group in first PBT profit since dollarisation• Improved cash generation• West Africa now self-sustaining after restructuring
  6. 6. 2012/2013 FOCUS • RevPAR growth leveraging on  Volumes and ADR growth at the Resorts  ADR growth in the City hotels • Product refurbishment and systems upgrade • Reduction of borrowing costs and gearing • Further cost optimization, especially in light of the NEC wage increases • Achieve EBITDA in excess 8% going forwardNew Monos Restaurant
  7. 7. FINANCIALS
  8. 8. TURN-AROUND: FIRST POSITIVE EBIDTA AND PBT SINCE DOLLARISATIONUS$ millions 31 March 31 March ▲% 2012 2011Revenue $ 26,2 22,5 +16Cost of Sales $ (8,0) (6,9) +16COS % 31 31 -Gross Profit $ 18,2 15,7 +16Operating expenses $ (16,0) (15,0) +7EBITDA $ 2,2 0.7 +227EBITDA margin % 8.3 2.9 -Other income 1,7 - -Other expenses (2,3) (1,9) -121Profit/(Loss) before tax from continuing ops $ 1,3 (1.1) +230 • Turn around [EBITDA & PBT] due to: • Closure of loss making hotels and shedding of non-core operations • Recovery of hotels in Victoria Falls • Gains from staff restructuring • Other income of $1.7m – mainly Holiday Inn Accra termination fees • Other expenses include depreciation, interest and impairment
  9. 9. REVPAR DOUBLE SINCE DOLLARISATION RevPAR Trend $46 $50 $33 $40 $23 Sep-09 Sep-10 Sep-11 Mar-12 *Sep-12• Trend expected to continue driven by  ADR growth in city hotels after refurbishment  ADR and occupancy growth in the resorts
  10. 10. REVPAR GROWTH LARGELY DRIVEN BY OCCUPANCY AND ADR RECOVERY KPIs HY on HY: % Growth 50% 44% 40% 32% 30% 23% 24% 20% 20% 20% 16% 15% 15% 10% 10% 6% 7% -4% 1% 0% -8% 0% -5% 0% -10% H2 09 H1 10 H1 10 H1 11 H2 11 H1 12 -20% RevPAR ADR Occupancy• All our KPIs on the rise• RevPAR growth driven by occupancy thus far• Drop in occupancy in H1 of 2011 and H1 of 2012 is predominantly cyclical
  11. 11. STRONG RECOVERY FROM RESORTS City Hotels ResortsRevenue ↑ 9% ↑ 32%EBITDA ↑16% ↑502%Occupancy ↑16% ↑14%ADR ↑9% ↑12%RevPAR ↑26% ↑28%• Recovery in resorts spurred by increase in foreign arrivals in particular for Vic Falls• City hotels to benefit from ADR growth after refurbishment
  12. 12. COST POSITION IMPROVESAll figures in US$ million March 2012 March 2011 Change over SPLYCentral Office/Oversight 2,813 3,805 ↓ 26%Hotels 13,186 11,185 ↑ 19%Total 15,999 14,990 ↑ 7%As % of Revenue 61% 67% -• Drop in oversight costs attributable to restructuring• Hotel costs up due to;  Increased utility costs, mainly ZESA  Increased generator costs arising due to power cuts  Rent increased in line with revenue  Wages increased by 37%
  13. 13. POSITIVE GENERATION FROM OPERATIONS 31 Mar 31 Mar •Working capital changes impacted byCashflow 2012 2011 retrenchment provisions of $2.8m US$m US$m settled during the period under reviewOperating profit 3,359 (0.747)Working capital changes (1,847) 1,082 •$5.56m in cash and $1m in undrawnCash generated from operations 1,512 0,335 facilitiesCash used in investing activities (3,719) (1,152) •$3.72m investment is mainlyNet financing raised 4,056 1,468 refurbishmentIncrease in cash 0,917 (0.210)Exchange Difference (0,016) (0,023) •Net financing raised mainly attributableCash at beginning of period 4,658 2,811 to drawdown on our long-term facilitiesCash at end of period 5,558 2,624
  14. 14. MORE THAN $2M INVESTMENT IN LONG-TERM ASSETSBalance sheet 31 Mar12 30 Sept 11 •$2.5m investment in long-term assets financed through further drawdown from our US$m US$m long-term facilitiesAssetsLong term assets 32,460 30,029 •Drop in current assets due to disposal ofCurrent assets 14,483 16,440 HotelserveTotal assets 46,943 46,469 •Current liabilities include $8.8m short-term loansEquity and liabilitiesShareholders equity 15,311 15,163 •Long-term loans to reduce with exit from BotswanaNon-current liabilities 9,793 7,378Current liabilities 21,839 23,928 •Gearing at 42% following drawdown on long-Total equity and liabilities 46,943 46,469 term loans, but to improve in H2Gearing 42% 36%
  15. 15. QUESTION & ANSWER
  16. 16. THANK YOU!!!

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