RTG ex­its Mozam­bique mar­ket

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga Se­nior Busi­ness Reporter

RAIN­BOW Tourism Group (RTG) has set sights on main­tain­ing a rev­enue growth mo­men­tum by fo­cus­ing on for­eign busi­ness while main­tain­ing its share of do­mes­tic mar­ket, the chair­man John Chikura has said.

In its unau­dited fi­nan­cial re­sults for the half year ended June 30, 2016, the hos­pi­tal­ity group ex­pressed hope that the sec­ond half of the year, which tra­di­tion­ally con­trib­uted 60 per­cent of its an­nual busi­ness over the past years, would yield good re­sults.

“To achieve this, we will con­tinue to in­tro­duce ex­cit­ing rev­enue gen­er­at­ing pro­grammes to the lo­cal mar­ket. On the in­ter­na­tional stage, the group is open­ing new mar­kets as well as con­sol­i­dat­ing the rev­enue streams from ex­ist­ing source mar­kets,” he said.

Dur­ing the pe­riod un­der re­view, the ho­tel group recorded a turnover growth of four per­cent to $11,8 mil­lion from $11,3 mil­lion recorded in 2015.

“Dur­ing the first four months of 2016, rev­enue growth was sig­nif­i­cant but it de­cel­er­ated in May and June due to ex­oge­nous fac­tors, which im­pacted the busi­ness,” he said.

Mr Chikura said the chal­leng­ing mar­ket en­vi­ron­ment has re­sulted in the group sharp­en­ing its fo­cus on cost re­duc­tion.

As a re­sult of the im­pact of dis­con­tin­ued op­er­a­tions, he said the group posted a loss of $3 mil­lion dur­ing the pe­riod un­der re­view com­pared to a loss of $1,9 mil­lion recorded dur­ing the cor­re­spond­ing pe­riod last year.

The hos­pi­tal­ity group ter­mi­nated the lease agree­ment on Rain­bow Beit­bridge Ho­tel with the Na­tional So­cial Se­cu­rity Author­ity on May 31, 2016, said Mr Chikura, adding that the de­ci­sion was nec­es­sary to ar­rest fur­ther losses.

“The loss from dis­con­tin­ued op­er­a­tions ($1,6 mil­lion) in­cludes loss on exit from Rain­bow Beit­bridge Ho­tel of $600 000 and an im­pair­ment charge of $500 000 for Rain­bow Ho­tel Mozam­bique as­sets.

“At half year, the to­tal debt re­duced to $18,2 mil­lion from $19,4 mil­lion as at De­cem­ber 31, 2015.”

He said the board has also re­solved to exit Rain­bow Ho­tel Mozam­bique ef­fec­tive Septem­ber 30, 2016 due to de­clin­ing per­for­mance as a re­sult of po­lit­i­cal in­sta­bil­ity in that coun­try as well as cut backs in gov­ern­ment spend­ing and re­sul­tant ex­change rate trans­la­tion losses.

“In the 18 months to June 2016, the Met­i­cal has de­pre­ci­ated sig­nif­i­cantly against the US dol­lar. We be­lieve this to be the right time to exit the Mozam­bique mar­ket and cush­ion the group from a worse po­si­tion,” he said. — @okazunga

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