Ebola Rocks African Sun Profits

By John Chimunhu

Now Daily Business

African Sun says the Ebola outbreak in West Africa in 2014 impacted on the business, leading to a marginal profit of $300 000.

A statement announcing lacklustre official results from the group for six months to 31 March 2015 says the ‘disinflationary environment’ in Zimbabwe persisted, characterized by “liquidity constraints and depressed consumer demand.”

“This was worsened by the remnant effects of the Ebola disease outbreak in West Africa that impacted our Victoria Falls and Ghana properties. The regional market continues to suffer from the depreciation of the South African Rand against major currencies, making Zimbabwe an expensive destination,” African Sun Ltd’s statement said.

The deadly Ebola, a wasting disease, had a global impact as big-spending tourists and business travellers were advised against foreign travel, with Asia recording a 53 percent decline in business for 2014.

African Sun, however, recorded an increase in room occupancy and revenue per room. The company attributes this to improved conferencing business in Zimbabwe, where revenue per room increased by 10 percent from $40 to $44.

The profit of $302 771 compares favourably to a loss of $1 919 733 for the similar preceding period. Earnings per share was (0.21), while $182 378 went to taxes.

The group rents 12 hotel properties in Zimbabwe and one in Ghana, manages four others in Nigeria under management contracts and has a sales office in South Africa.

African Sun says it earned $5.83 million from the disposal of its 16.54 percent investment in Dawn Properties, which owns the group’s flagship Crowne Plaza in Harare.

Edwin Shangwa is acting CEO since the departure of Shingi Munyeza. Herbert Nkala is chairman while former Zimbabwe Council for Tourism boss Emmanuel Fundira sits on the board.

© John Chimunhu, Now Daily, 2015. All Rights Reserved.

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