HomeBusiness DigestCresta Zim spurs TA results

Cresta Zim spurs TA results

Shakeman Mugari

A SOLID performance by Cresta Zimbabwe helped newly-restructured investment group, TA Holdings Ltd record results at the top end of market expectations for the six months

to June.

Zimbabwean hotels put up a significant performance which helped the company to firm earnings despite the downturn in the local tourism industry.

The company said 94% of the hotel business came from the domestic market, 5% from South Africa, with international arrivals contributing 1%.

The group said the hotels were expected to have a better second half while the ongoing refurbishment was expected to have an impact during the third quarter.

However, Botswana hotels had a disappointing performance during the period under review suffering a loss of about P2 million.

The hotels are now operating at break-even point and a major recovery is expected in the second quarter after the completion of the current renovations.

“Our performance in Botswana was affected by the Sars effect, inception of new players and the Zimbabwe effect,” said special assistant to executive chairman Osbourne Majuru.

Associate company Sable Chemical Industries remained the largest contributor to the group’s profits despite the negative impact of price controls on fertiliser.

There are also prospects for increased earnings on the coming quarter buoyed by the recent price increases allowed by government. Chairman Shingi Mutasa told analysts that Sable Chemicals had begun exporting fertiliser to meet the foreign currency requirements.

Another associate company ZFC made firm earnings during the period under review.

In the insurance sector, Zimnat Lion in which TA owns 54% saw gross written premium jump 350% to $12,25 billion during the comparative period last year.

Investment income increased 459% during the same period last year.

However Zimnat Life remained in the woods posting below inflation premium income partly due to the delayed Intermarket merger.

The proposed Intermarket Holdings Ltd deal is also likely to drag on for some time.

“We are still waiting for a decision from the Commissioner of Insurance,” said Majuru at a briefing held this week. “TA Holdings is in no position to set the time-frame for the deal to be complete. However the company has been lobbying.”

The group has signed two management contracts in Malawi and Ghana.

The contracts will commence next month and should have a positive impact on group bottomline in the next quarter.

Uganda has also been targeted for expansion in the hotel business.

For the six months to June, TA recorded an earnings per share of 1,646 cents up from 173 cents achieved in the same period last year.

Profit before tax increased 615% on the back of turnover that rose to $21,1 million from $5 million last year.

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