Plans to dispose of the loss-making operations were already at advanced stage and the transactions would be concluded by June.The group had earmarked Touch the Wild Lodges, Tourism Services Zimbabwe and Matetsi Water Lodge for disposal.
“We have made a bold strategic decision to exit the loss-making tour operations business and to focus on our key business and city hotel offering,” Mtasa said.
She added the recapitalisation of the group would be necessary this year in order to strengthen the business, retire debts and to complete the group’s aggressive refurbishment plans.
The financial results released last week showed that the company had turned the corner and was on its way to profitability despite a challenging operating environment characterised by poor domestic air access to resort areas of the country, liquidity challenges in the local financial sector, and operational challenges in its tour operations businesses.
The group’s loss for the year was reduced by 68% to US$371 443 from US$1,152 million in the prior year on the back of a massive 32% increase in turnover to US$27,3 million from US$20,7 million in the prior year. The combined effect of operational improvement and increased international tourist arrivals saw the group’s EBITDA rise a massive 863% from a negative of US$354 441 in the prior year to US$2,8 million.
Overall profit from continuing operations was US$1,8 million whilst the blemishes came from an operating loss of US$916 741 incurred by the discontinuing operating units.
The hotel chain attributed its increased turnover to an increase in its average daily room rates which rose 10% from US$68 to US$75 whilst room occupancies in the domestic hotels were higher at 47% compared to 41% in the prior year.
However, occupancy at their external operations, mainly Mozambique, only improved marginally from 34% to 35%.The group stated that its Mozambican hotels performed above expectations and plans to consolidate its hotel offering.The company also announced that the current FD Paschal Changunda will be taking over as CEO from April 1 2012.
Mtasa highlighted that the group was now benefitting from increased tourist arrivals despite limited air access to Zimbabwe.Mtasa said her group was now reaping the benefits of the deliberate massive refurbishment programme which the hotel chain embarked on in order to reposition their product.
“Delays in the conclusion of the recapitalisation programme have led to higher debt levels for the group and therefore increased finance charges due to the prevailing high interest rates’’, she said.
She pointed out that the completion of works started at Rainbow Towers were now on course but these had significantly been delayed by the curatorship of Rennaissance Merchant Bank where the funds for the works were held up.
RTG said it was presently refurbishing Hotel Mozambique in Beira with plans to establish another property in Tete. Construction of the NSSA-funded Beitbridge Hotel Project was at an advanced stage and the hotel was earmarked for opening later this year.
Mtasa, who is retiring to pursue personal interests, leaves the group well positioned for growth.
“We have surely turned the corner, the fact that losses from non-performing units will be non-recurring is positive for the group,” Mtasa said.
The company announced that the current FD Paschal Changunda will be taking over as CEO from April 1 2012.