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TA Holdings profits dip to US$3.2m
02/07/2013 00:00:00
by Roman Moyo
 
ZFC disposal plan ... Shngi Mutasa
 
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TA Holdings says will report loss on Sable

ZIMBABWE Stock Exchange-listed group TA Holdings says its revenue in the first quarter rose seven percent to US$15,9 million after improved performance from the group’s hotel and insurance businesses.

Profits for the full year to December 2012 however declined to US$3,2 million weighed down by a rise in net claims and losses in the group’s agrochemicals unit. In 2011 the company posted a US$6,2 million profit.

Group chief executive, Gavin Sainsbury, said the insurance and hotels divisions had performed to expectations while the agro-chemicals operations were still depressed.

“In insurance, gross written premium was up in the last six months compared to the same period last year. Both Zimbabwe and outside operations were profitable,” Sainsbury said at the company’s AGM.

“Cresta Zimbabwe revenues increased five percent from the year ago period mainly driven by an increase in RevPar. Cresta Marakanelo revenues increased 13 percent in pula terms but due to the depreciation of that currency to the US$, revenue only increase two percent in dollar terms”

Refurbishing work is also underway at Sprayview Hotel in Victoria Falls ahead of the United Nations World Tourism Organisation General Assembly to be jointly hosted by Zimbabwe and Zambia this August.

Sainsbury also said negotiations for a viable electricity tariff are still on-going with the relevant authorities

TA’s regional operations which include hotels and insurance in Botswana and Uganda, continued to outshine local units as seen by growth in after tax profit which rose to US$4,4 million from US$3,6 million.

Profits from local units dipped to US$1,1 million from a US$2,6 million profit achieved in prior comparative year.

Net insurance claims during the period under review rose to US$22 million from US$19 million recorded in the comparative prior year.

Gross written premiums for Zimnat Life, the group’s local insurance arm rose by 59% compared to the same period last year largely as a result of an increase in individual life and employee benefits business.

In the hotels division, an improved revenue-per-available-room outturn saw Cresta Zimbabwe grow its profit before tax position.

Sable chemicals and ZFC, the group’s agrochemicals units, incurred losses citing low production of ammonium nitrate and liquidity constraints.



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“Ammonium nitrate production was 28 percent lower than what was produced largely due to … the suspension of electricity supply in the first half of the year, together with consequential mechanical breakdowns,” said the company in a statement accompanying the audited financial results.

Group chairman, Shingi Mutasa, said a plan to shut down the electrolysis plant at Sables – which is 51% owned by TA - and import ammonia instead had been abandoned due to “unprecedented increases” in global ammonia prices last year.

“Consequently, Sable will continue using the electrolysis plant to manufacture ammonia whilst engaging the Government and Zimbabwe Electricity Supply Authority (ZESA) to secure a viable electricity tariff,” he said.

“In the meantime Sable is also continuing with its efforts to change ammonia production technology within the next five years.”
The group is however still pursuing plans to dispose of its 22 percent interest in ZFC.

“The process to divest out of ZFC Limited is still underway and, as highlighted in 2011, this process will be protracted and complicated,” Mutasa added.


 
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