Gaming for Africa Magazine - Issue 155

Page 10

Tsogo Suns Hotels Warns of R3.4bn Fall in Revenue SA’s biggest hotel operator, Tsogo Sun Hotels, has warned of a revenue fall that exceeds its R3.37bn market value, as the industry grapples with a slump in tourist and business travel as a result of Covid-19. REVENUE IS expected to be up to 76% lower, or R3.4bn, to end-March Tsogo Sun said in a trading update, also warning of an up to R1.5bn fall in core profit, to a loss of about R189m. In a SENS update, shareholder are advised that Tsogo Sun Hotels is scheduled to release its financial results for the year ended 31 March 2021 onor about 27 May 2021. Part of the SENS update reads: In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, listed companies are required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported on, will differ by at least 20% from those of the prior comparative period, being 31 March 2021. Shareholders are accordingly advised that: – Revenue is expected to be between 72% and 76% lower (R3,222 million and R3,401 million lower), compared to the prior comparative period of R4,475 million. – EBITDAR is expected to be between R1,516 million and R1,541 million lower compared to the prior comparative period of R1,352 million. – Earnings per share (“EPS”) is expected to be a loss of between 8% and 20% lower (between 67.6 cents and 77.7 cents) compared to the EPS loss of the prior comparative period of 84.5 cents.

– Headline earnings per share (“HEPS”) is expected to be a loss of between 57.4 cents and 66.7 cents compared to the prior comparative period HEPS of 20.4 cents; and – Adjusted HEPS is expected to be a loss of between 47.4 cents and 55.1 cents compared to the prior comparative period Adjusted HEPS of 26.2 cents. EPS results are impacted by exceptional losses of R263 million (2020: R1,174 million) net of tax and non-controlling interests, the majority of which relates to fair value losses on the revaluation of the externally-managed investment properties in Hospitality Property Fund Limited, property, plant and equipment impairments of a number of hotels in South Africa and Offshore as well as impairments of Offshore investments. The majority of the quantum of these impairments are due to management’s assessment of the negative impact of COVID-19 on forecast cash flows generated by the underlying hotels for the financial years ended March 2022 and March 2023, as well as the volatility in the bond market and increased in-county risk assessments that have had a material impact on discount rates across the portfolio. Excluding the impact of these exceptional items, HEPS and Adjusted HEPS are expected to be losses of between 57.4 cents and 66.7 cents and

between 47.4 cents and 55.1 cents respectively, reflecting the difficult year with substantially reduced trading volumes. Liquidity and access to facilities are of paramount importance and the Group has met the revised covenant requirements at the December 2020 and March 2021 measurement dates. The Group extended a R600million general banking facility, of which R100 million was utilised at 31 March 2021, which was due to expire in June 2021, to June 2022. There are no other facilities expiring within the next 12 months. The lenders to both Tsogo Sun Hotels and the now wholly owned Hospitality Property Fund Limited have been supportive of the Group during this challenging period and have approved the covenant waivers for September 2021. As a consequence of these interventions and having reviewed the cash flow forecast, directors are of the view that the Group has sufficient resources to continue operations as a going concern in a responsible and sustainable manner. The Group continues with the implementation of its Covid-19 action plan to contain costs and preserve cash. The financial information on which this trading statement is based has not been reviewed and reported on by the Company’s external auditors.

Jabu Mabuza Passes Away The former group CEO of Tsogo Sun, Jabu Mabuza, has died following complications from covid-19. MABUZA, A towering figure in South African industry held a number of high-profile roles in the business and tourism sector, including leadership roles at Multichoice, Eskom and the South African Tourism (SA Tourism) Board. The 63-year-old Mabuza was first appointed to the SA Tourism Board in 2003. In his nine years on the SA Tourism Board, he served six of those years at the helm of the organization as Chairperson. “It’s a sad day for the nation to lose a person of his stature and calibre as he contributed to the success of many industries and sectors, including

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Gaming For Africa

tourism,” commented SA Tourism Board Chairperson, Siyabonga Dube. “He led our organization through the tough times of the economic crisis in 2008/2009 and then through the successful times of the 2010 FIFA Soccer World Cup where the tourism sector enjoyed some of its greatest achievements from an arrivals and economic growth perspective.” “Jabu was also a champion in leading the way for the transformation of the sector and was key to pushing for equal and added opportunities for Black businesses and entrepreneurs and for inspiring the

emergence of Black businesses and entrepreneurs,” added Dube. After Mabuza left SA Tourism in 2012, he never left the sector though as he served in various capacities at Southern Sun, Tsogo Sun Holdings and Sun International. He also served as South Africa’s representative on the board of the World Travel and Tourism Council. At the inaugural Lilizella Tourism Awards in 2013, Mabuza also received the first ever Minister’s Award from the then Minster of Tourism, Marthinus van Schalkwyk. June / July 2021


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